Engie Locks Virtual Offtake for Neoen’s 270-MW Queensland Battery

May 8, 2025 10:25 AM ET
  • Engie signs a virtual PPA for Neoen’s 270 MW/540 MWh Western Downs Battery in Queensland, gaining trading rights to the storage asset ahead of its 2025 launch.

French energy major Engie has taken a digital stake in Australia’s storage boom, signing a virtual power-purchase agreement (VPPA) for the entire first stage of Neoen’s Western Downs Battery in Queensland. The deal gives Engie the financial right to “charge” and “discharge” 270 MW/540 MWh of capacity—without owning or operating a single Megapack on site. 

How the virtual battery works

Unlike a traditional offtake tied to physical electrons, a VPPA acts as a hedge: Engie’s trading desk can mimic battery behaviour in software, buying low-priced daytime power and “selling” it back at evening peaks. Neoen, meanwhile, runs the hardware near Chinchilla, 300 kilometres northwest of Brisbane. Both sides settle the price difference against the National Electricity Market spot rate, turning volatility into predictable revenue streams. 

Why Western Downs matters

Stage 1 of the Western Downs Battery is being built alongside Neoen’s 460-MWp solar farm—already one of the country’s largest—and is slated to start operations in early 2025. A Stage 2 expansion of equal size is waiting in the wings after Neoen inked a similar “virtual battery” deal with AGL Energy last year, signalling investor appetite for flexible capacity as Queensland targets 70 percent renewables by 2032. 

Benefits for Engie

The agreement gives Engie Global Energy Management & Sales (GEMS) a powerful risk-management tool just as coal retirements and rooftop solar push intraday price swings to record highs. It follows an earlier, smaller Engie-Neoen contract for Victoria’s Big Battery and deepens the pair’s collaboration on grid-balancing products that do not require building new wires. 

Wider market impact

Virtual batteries are fast becoming a mainstream finance instrument in Australia’s energy transition. They free developers to lock in cashflow before construction is complete, while letting retailers and large corporates access storage benefits without heavy capex. Analysts at Energy-Edge expect more than 3 GW of virtual capacity to be under contract nationwide by 2026, mirroring the rapid uptake of physical batteries that has already pushed installed storage past 10 GW. 

As Western Downs races toward first electrons, Engie’s VPPA underscores how innovative commercial models can unlock capital and speed the shift from coal to firmed renewables—one virtual discharge at a time.