News: MQG UPDATE 1-Macquarie, France's Engie to build Australian battery with Fluence

• 150 MWh battery project to cost around $100 mln
• Engie sees Hazelwood storage capacity growing to 1600 MW
• Fluence wins tender to supply its Gridstack system

(Recasts with Engie Australia CEO's comments)

Macquarie Group's (MQG) green investment arm has teamed up with France's Engie SA ENGIE.PA and U.S. energy storage firm Fluence Energy FLNC.O to build an energy storage project in Australia, the companies said on Wednesday.

The 150 megawatt (MW) battery, funded by energy group Engie and Macquarie's Green Investment Group, will be built at the site of Engie's now closed Hazelwood power station in Victoria, and will be built and run by Fluence over 20 years.

The companies did not disclose the project's cost, but Engie Australia and New Zealand Chief Executive Augustin Honorat said it was less than A$1 million per megawatt, implying a cost of less than A$150 million ($107 million).

The Hazelwood project will be able to store and deliver 150 megawatt-hours (MWh) of energy.

Construction is already underway with the aim of switching on the battery by November next year, in time for the southern hemisphere summer when back-up power is often needed during heatwaves and unexpected power outages.

"The Hazelwood Battery Energy Storage System ... will play a critical role in increasing renewable energy capacity in Victoria, while delivering further grid stability for the state," the companies said in a statement.

Engie is looking to take advantage of the Hazelwood site to expand in energy storage as it has transmission capacity of 1600 MW from its former days as a major coal-fired generator in the state of Victoria.

"We could go up to 1600 (MW), and I think at some point in time we will reach that, but we wanted to start smaller than that," Honorat told Reuters in an interview.

He said battery prices, which have dropped 50% over the past three years, would need to fall further, and power market prices would have to rise in order to justify building more energy storage capacity.

The project will be the first in Australia to use Fluence's Gridstack battery system. ($1 = 1.3982 Australian dollars) (([email protected]; Twitter: https://twitter.com/sameer_manekar))