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Korea Zinc Enters Australian Battery Energy Storage Business with Hanwha

Arc Energy Supplies Power in New South Wales for 14 Years
Hanwha Selected as Preferred Negotiation Partner for Battery and Other Suppliers

Korea Zinc, which is engaged in a management rights dispute with Youngpoong and MBK Partners, has joined hands with Hanwha, considered an ally, in Australia's battery energy storage system business.


Korea Zinc announced on the 26th that it has selected Hanwha as the preferred negotiation partner for the supply of a system integration package including batteries for the 'Richmond Valley Energy Storage System Project,' the largest battery energy storage system (BESS) project in Australia, conducted by its Australian subsidiary Arc Energy.


Korea Zinc Enters Australian Battery Energy Storage Business with Hanwha Choi Yoon-beom, Chairman of Korea Zinc, is speaking at a Korea Zinc press conference held on the 13th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. On this day, Chairman Choi stated, "I will step down from the position of chairman of the board as soon as possible and have an outside director take over as chairman of the Korea Zinc board." Photo by Kim Hyun-min

Korea Zinc and Hanwha established a strategic partnership in September 2022 through a share swap between Arc Energy and Hanwha Impact’s U.S. subsidiary HPS Global. In July last year, they launched a Korea-Australia consortium for joint review of green hydrogen projects, continuing close cooperation in the eco-friendly energy sector.


The selection of Hanwha as the preferred battery supplier is significant as Korea Zinc and Hanwha Group continue their collaboration in eco-friendly renewable energy and hydrogen businesses and jointly target the rapidly growing BESS market in Australia, recently driven by government initiatives, the company explained.


In New South Wales, where Sydney, a major Australian city with the highest energy consumption, is located, the goal is to replace 12GW of power currently generated by existing thermal power plants with renewable energy generation by 2030. As part of this policy, the state aims to secure 2GW of long-duration energy storage to maintain grid stability.


Accordingly, Arc Energy’s Richmond Valley Energy Storage System project was selected in last year’s bidding for the electricity infrastructure construction support program in New South Wales. In December last year, Arc Energy signed a Long-Term Energy Service Agreement (LTESA) with the New South Wales (NSW) state government.


Arc Energy is expected to contribute to enhancing the stability of the New South Wales power grid and generate stable profits through energy arbitrage, including government subsidies.


Arc Energy will oversee project development, while Hanwha will be responsible for the design, procurement, and commissioning of the batteries. Construction is scheduled to begin in the third quarter of next year, with commissioning planned for mid-2026. Under the LTESA contract, the project will provide up to 275MW of power capacity and 2200MWh of energy storage services to the New South Wales electricity market for 8 hours daily over 14 years.


Arc Energy has spent a year conducting a fierce competitive bidding process to find a supplier capable of providing a 2200MWh battery that can discharge for 8 hours, meeting stringent regulations and certification standards while understanding the Australian power industry. After carefully comparing the technological capabilities and competencies of various domestic and international companies, Hanwha was finally selected as the preferred negotiation partner. The two companies plan to form a task force from the end of this month to discuss detailed terms and sign a supply contract early next year.


The exact contract size has not been disclosed but is expected to reach several hundred billion Korean won.


A Korea Zinc official said, "The Richmond Valley Energy Storage System project is the first case of commercialization in Australia in the renewable energy business, a core part of Korea Zinc’s future growth strategy, the Troika Drive, in collaboration with Hanwha Group. The two companies plan to continue their business cooperation going forward."


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