A recent article from Clayton Utz (accessible via the link below) considers the role that battery energy storage systems (BESS) will play and should play in powering data centres.
The article reports that “in a significant development for the sector, Supernode data centre owner Quinbrook Infrastructure Partners announced the addition of one gigawatt hour of capacity to the co-located battery energy storage system at its Brisbane campus – making it the largest BESS in Australia”.
A number of recent reports indicate considerable growth in the power requirement of Australian data centers and that therefore “co-location with a utility-scale BESS presents a compelling opportunity for data centre operators and infrastructure investors to reduce energy costs, improve operational resilience, and unlock multiple revenue streams”.
The article indicates that batteries are “increasingly playing a critical role in stabilising the grid and integrating renewable generation”. The case for the colocation of battery storage with data centres is made in terms of a decline in battery prices (and therefore reduced Capex), their role in reducing energy expenditure and the opportunity to generate income through “market-facing services”. Specifically for data centre operators, future-proofing energy operations, delivering on sustainability commitments and cost-control are highlighted.
Additionally, the opportunities for “revenue stacking” (earning income via co-locating a BESS with a data centre) are considered through frequency control ancillary services, network support and constraint relief, and energy arbitrage. The article then lists the advantages for data centre participants, including improved resilience and reliability, energy cost reduction, peak demand management, capacity firming for renewables, sustainability and net zero alignment, and participation in emerging markets.
The $2.5 billion Supernode project mentioned in the article is located at Quinbrook’s Brendale campus in Queensland. It integrates four hyperscale data centre installations with what will be Australia’s largest battery energy storage system. The BESS is being developed in three stages. In late 2024, Quinbrook entered into tolling arrangements with Origin Energy for the first two stages (520 MW/1,856 MWh) and Queensland Government-owned generator Stanwell Corporation for the third stage (250 MW/1,010 MWh). Under tolling arrangements, the BESS is “leased” to a third party to operate, maintain and earn NEM [National Electricity Market] market revenue from (and pay market costs for), in exchange for fixed “rent” payments.