Neoen has launched construction of Western Downs Battery Stage 3 in Queensland after issuing notices to proceed to Tesla and UGL, while also completing Stage 2, bringing the operating capacity of the Western Downs Battery to 540 MW / 1,080 MWh across its first two stages.
Stage 3 will add an additional 305 MW / 1,220 MWh of storage and will become Neoen’s fourth asset within the Western Downs Green Power Hub, located near Chinchilla on Barunggam country. The four-hour battery will include 312 Tesla Megapack 2XL units with grid-forming capabilities and will connect to Powerlink’s Western Downs substation. It is expected to begin operating during the Australian summer of 2027–28.
The completion of Stage 2, delivered ahead of schedule, supports Neoen’s virtual battery agreements with AGL Energy and Shell Energy. Virtual battery contracts allow energy retailers and large users to hedge load by virtually charging and discharging the Western Downs Battery without developing or operating a physical asset.
Neoen has also signed two new virtual battery agreements with ENGIE. A 25 MW / 50 MWh contract is supported by Stage 2, while a 50 MW / 200 MWh contract will be backed by Stage 3. The deals expand ENGIE’s contracted virtual battery capacity, helping it manage renewable intermittency and add flexibility for its customer load.
Western Downs Battery Stage 1 and 2 now provide 540 MW / 1,080 MWh of capacity to the National Electricity Market, delivering grid reliability, frequency support and firming services. Both stages use grid-forming inverters that help reduce Queensland’s reliance on coal and gas generation. Once Stage 3 becomes operational, the combined Western Downs Battery will offer 845 MW / 2.3 GWh of capacity to support the state’s energy transition.
With the launch of Stage 3, Neoen’s total battery storage portfolio in Australia has grown to 2 GW / 6.4 GWh in operation or under construction, reaffirming its position as the country’s largest owner and operator of big batteries.
Neoen Australia CEO Jean-Christophe Cheylus said the milestone reflects the company’s leadership in grid-scale storage. “The launch of this new 4-hour battery at Western Downs further highlights Neoen’s innovation and leadership in big batteries and takes us past 2 GW of storage capacity in Australia. We’re delighted to have signed two new contracts with ENGIE, and I thank them for placing their trust in us once more. Stage 3 is our seventh storage project with Tesla and UGL, and we look forward to switching it on together soon.”
ENGIE Australia Head of Energy Management and B2B Jules Dufournier said the new agreements demonstrate the value of virtual storage in delivering customer flexibility. “This agreement complements our existing battery portfolio under construction in South Australia, enabling us to offer shaped products and tailored solutions that meet our clients’ specific needs. By combining market innovation with flexibility, ENGIE continues to help customers achieve their sustainability goals while navigating Australia’s dynamic energy landscape.”
Neoen Group CEO Xavier Barbaro said Western Downs provides a model for future developments. “We are proud to be making an ongoing contribution to Queensland’s energy future through the expansion of our Western Downs Green Power Hub. This expansion is underpinned by the strength and value of our virtual battery solution. Western Downs provides us with an inspiring template for growth in other regions, as we continue to accelerate the pace of the energy transition in Australia and around the world.”
Photo_Credit: Neoen_Western Downs
