Meridian Energy’s Ruakākā Battery Energy Storage System was officially opened today. Photo / Supplied
Meridian Energy’s Ruakākā Battery Energy Storage System was officially opened today. Photo / Supplied
Meridian Energy says its Ruakākā Battery Energy Storage System (Bess) will give the hydro power generator some much-needed variability in terms of what it can offer the national grid.
Bess, New Zealand’s first large-scale grid battery storage system, was officially opened on Friday.
The facility has a maximum output of100 megawatts of electricity and storage capacity of 200MW hours – enough to power about 60,000 average households during winter for a two-hour period.
Construction of the Bess, just south of Whangārei, began in the first quarter of 2023 and has been completed inside the project’s original $186 million budget.
Meridian’s general manager development Guy Waipara said Bess would add a North Island storage asset to New Zealand’s electricity system.
“It gives us the ability to load shift between price periods, smooth out peak periods, provide greater resilience to Northland and enable Meridian to participate in the North Island electricity reserves market,” he said.
While construction of Bess is complete, some steps remain before it can become fully operational.
Meridian’s focus has now turned to the neighbouring $227m, 130MW Ruakākā Solar Farm, with construction set to begin in August 2025.
Together with the Bess, the two will form Meridian’s Ruakākā Energy Park.
Ruakākā is part of Meridian’s plan to invest $3 billion on renewable power generation over the next five years.
Meridian Energy's Guy Waipara says it will soon be able to participate in the North Island electricity reserves market.
The company has four other projects already consented, including another Bess in Manawatū, and several others progressing through consenting processes.
In addition to Manawatū, Meridian intends to incorporate batteries into a number of new solar farm projects.
Meridian’s head of wholesale operations Chris Garr said the company is already an “expert” on hydro and wind-powered electricity generation.
“At any one stage we can have years where there’s no wind and there’s not much water – like last year – but broadly speaking, wind and water works really well,” he told the Herald.
“Water is quite reliable over three months to six months, but that’s where its reliability runs out because it’s quite variable over a year.”
Wind is more reliable over a year than water, he said.
“That means that we often will run our hydro harder when the wind dies down unexpectedly.
“When the wind is blowing harder than we anticipate, we back off the hydro.
“So we optimise our portfolio between wind and water, and that works well.”
By moving into solar, there will be more interaction between the assets.
But Garr said solar has a different kind of variability altogether – a matter of minutes or hours.
“A cloud comes over or an unexpected storm comes in place and creates volatility in the system.
“You can use water to offset that, but batteries work quite well in terms of responding to those very short-term fluctuations.”
About 83% of Meridian’s power comes from hydro assets, with the rest coming from wind.
“We are just starting to embark now into a little bit of solar, but we’re thinking about batteries for a bunch of reasons.
Meridian Energy West Wind farm, Wellington. The company says wind is more reliable over a year than water. Photo / Supplied
“The biggest revenue driver for the battery is, firstly, that it provides reserve energy.”
As it stands, the electricity market trades energy but it also trades reserve energy.
Reserve energy comes in two types – fast reserve (six seconds) and slow reserve (60 seconds).
The reserve is there if other power sources come off quickly, providing back-up energy in case something bad happens.
Batteries are good at responding quickly and providing reserve energy, Garr said.
“A large chunk of the business case for the battery [Bess] is increasing the amount of reserve in the North Island,” he said.
“The second chunk is around what we call arbitrage [buying low and selling high].”
Garr regards batteries as a mix between a power station and a storage lake.
“It’s a bunch of generation for a certain amount of time, but the other thing that’s quite different is that it also consumes energy.”
He said it takes about 16% extra energy to get power stored in a battery.
In that sense, batteries are similar to pumped hydro systems because power is required to get water pumped into a lake.
“But what it allows you to do is take power when there’s an oversupply and move it into periods where there’s an undersupply of power,” Garr said.
“So, it allows us to move energy around.”
It also allows for the purchase of energy when it is cheap and selling it later at a higher price.
“A battery ideally takes in power when the price is low and discharges it when the price is high,” he said.
On average, the battery would probably sit at about 60 to 70% charged, allowing the company to buy cheap power when prices collapse.
“Then you would move up to a 100% charge, but you’ll be wanting to get it back down to around that 60%, 70% charge relatively quickly so that if other opportunities come up, you can take advantage of them.
“It’s just as important to be able to seek opportunities to buy low and then to sell higher.”
Garr said Meridian was noticing growth in power demand and higher demand peaks, particularly in winter, which is where batteries would step in.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
