AGL Greenlights $800 Million Tomago Battery with 500 MW Capacity

AGL’s Strategic Leap into Grid-Scale Storage

AGL Energy Limited has taken a decisive step forward in its energy transition strategy by reaching a Final Investment Decision (FID) on the Tomago Battery Project, a 500 MW grid-scale battery with a four-hour duration. Located in the Hunter Region of New South Wales, this project underscores AGL’s commitment to expanding its portfolio of flexible, low-emission energy assets.

With construction slated to begin in late 2025 and operations expected to commence by late 2027, the Tomago Battery will serve as a critical infrastructure piece in stabilising the grid and supporting renewable energy integration. The battery’s projected 20-year lifespan aligns with AGL’s long-term vision for a decarbonised energy future.

Financial and Operational Details

The total estimated construction cost for the Tomago Battery stands at approximately $800 million. This figure encompasses engineering, procurement, construction, project management, overheads, contingency, and interest during construction. AGL plans to fund the project through a combination of operating cash flows and existing debt facilities, including green capital expenditure loans, reflecting a balanced approach to financing sustainable infrastructure.

AGL has contracted Fluence, a specialist in energy storage solutions, to deliver the engineering, procurement, and construction services. This partnership leverages Fluence’s expertise to ensure the project meets technical and timeline expectations.

Building on a Proven Battery Portfolio

The Tomago Battery will complement AGL’s existing grid-scale battery assets, including the 250 MW Torrens Island Battery and the 50 MW Broken Hill Battery, both of which have demonstrated strong operational performance. Additionally, the 500 MW Liddell Battery is on track to begin operations in early 2026, further bolstering AGL’s flexible asset base.

AGL’s Managing Director and CEO, Damien Nicks, highlighted that the Tomago project is a milestone in the company’s broader decarbonisation strategy. He also noted a clear pathway to Final Investment Decisions for an additional 900 MW of grid-scale battery projects, signalling an aggressive expansion of AGL’s energy storage capabilities.

Implications for the Energy Market

This investment not only strengthens AGL’s position as a leader in Australia’s energy transition but also contributes to the stability and reliability of the National Electricity Market. As renewable energy sources like wind and solar become more prevalent, large-scale batteries like Tomago will play an essential role in balancing supply and demand, smoothing out intermittency, and reducing reliance on fossil fuels.

AGL’s approach of integrating multiple grid-scale batteries reflects a strategic pivot towards flexible, smart energy solutions that can adapt to evolving market and environmental conditions.