1 December 2022
1414 Degrees has recently reviewed the Aurora project to update the modelled revenue projections previously announced on 11 December 2020.
That modelling was based upon a project with both 70MW of solar PV and 70MW battery. The business case has evolved with changing market conditions favouring a 140MW battery connected only to the National Electricity Market (NEM).
Net cash flows from a 140MW battery on the Aurora Project were modelled in March 2022 under an agreement with Ovida Infrastructure Pty Ltd when the Aurora Project was owned 100% by the Company. The agreement with Ovida Infrastructure Pty Ltd was terminated prior to the sale of a 50% interest in SiliconAurora Pty Ltd to Vast Solar.
Cornwall Insight Australia (Consultant) performed the modelling and projected net revenue under various scenarios for a 140MW Battery Energy Storage System (BESS) connected to the 275kV transmission line at the site. They projected net revenue based on charging from the grid and sale of grid stability services (FCAS) and arbitrage for one and two hours of storage capacity over 20 years from end 2023. The Aurora BESS would charge from the transmission line.
The net revenue projections range from $25m to $97m per year for various scenarios in the first 5 years as shown in the figure below. The battery life is nominally 20 years.
Our Chairman, Dr Kevin Moriarty said “the revenue outlook for FCAS markets on the NEM has been increasing in recent years and is forecast to grow in the near term. The scenarios modelled prior to March of this year are already outdated by events driving higher volatility and increasing energy prices as gas prices rise and coal plant closures are brought forward. The long-term outlook for revenue from electricity storage is positive, however we can see potential for early payback that would minimise capital risk.”
Capital costs inclusive of connection are currently estimated at $154m for a 162MWh (1 hour) battery, and $235m for a 319MWh (2 hour) battery. In the future the connection substation could be shared with and earn revenue from other generators intending to connect on site, including Vast Solar and PV. The current scenarios favour a 162MWh battery in the near term but the project footprint will be designed for 319MWh.
Further modelling to prepare for financing of the project will be conducted by the SiliconAurora joint venture. Any development of the project is dependent on joint venture committee approval.
14D is pleased to announce the appointment of Mr Tom Thwaites as General Manager – Aurora for 1414 Degrees Ltd. Mr Thwaites is a chartered accountant with many years’ experience in PriceWaterhouseCoopers and then as Chief Financial Officer in operating companies. Mr Thwaites will manage the Company’s 50% interest in the Aurora Project through the SiliconAurora joint venture.
For more information
Please refer the 14D ASX announcement and learn more about the Aurora Energy Project.