• Contact’s first renewable project in Auckland to start immediately.

• Tesla selected as battery energy storage system supplier, the first Megapack 2 XL project in New Zealand.

• The battery system will discharge stored energy at a split second to significantly improve security of energy supply to New Zealanders.

• The project will be operational by March 2026.

The $163 million new grid-scale battery builds on Contact’s existing partnership with New Zealand Steel and will sit on its Glenbrook site in south Auckland. This site is ideal as it has flat land and a high voltage connection to the national grid. This will be the country’s newest large-scale battery, the closest to the largest city, and Tesla’s first Megapack 2 XL system in New Zealand.

Contact, in the agreement with Tesla, also has the option to expand the capacity of the battery to 130 MW at this site; a move which would make it New Zealand’s biggest battery.

The battery will store excess renewable electricity, often generated by the wind or sun in off-peak periods when demand is low, which would otherwise go to waste. It will rapidly discharge this electricity to the grid when it is needed and provide a backup supply of electricity for unexpected outages. 

Contact’s CEO Mike Fuge says the industrial-sized lithium battery will play a key role in maintaining a reliable supply of electricity for New Zealand, particularly during periods of high demand throughout the winter. It will also ultimately help with Contact’s transition away from an increasingly constrained gas market. 

“It’s a bit like the Swiss Army Knife of the electricity system, performing a range of roles that will ultimately keep the lights on and reduce carbon emissions.  The battery will supply power to the grid in an instant, quickly getting electricity to where it is most needed in the country.  It will also support the development of new renewables like wind and solar generation,” says Mike Fuge. 

“Contact has made a commitment for its generation to be net zero by 2035, and further reduce New Zealand’s remaining reliance on fossil fuel electricity generation.”

Contact will start work at the Glenbrook site immediately.  The battery is expected to take up to 18 months to install and will be commercially operational by March 2026. It will create around 50 jobs during construction. Contact will manage the overall project, with Tesla responsible for the supply and commissioning of the battery.  Tesla will also provide long-term maintenance services. 

In May 2023, Contact and New Zealand Steel announced an innovative renewable energy agreement enabling the steel mill to almost halve its carbon emissions. Through the flexible off-peak arrangement, Contact will provide 30MW of electricity to New Zealand Steel for its new electric arc furnace. By substituting coal and iron sand with electricity and scrap steel, New Zealand Steel will eliminate 800,000 tonnes of carbon from the time the electric arc furnace is fully operational. This is one percent of New Zealand’s total emissions.

New Zealand Steel Chief Executive Robin Davies says today’s announcement is further evidence of what can be achieved through a partnership approach to deliver resilience building decarbonisation initiatives at scale and speed.  

“We’re very pleased to be able to build on our existing partnership with Contact Energy through the installation of its new grid-scale battery at our Glenbrook site,” says Robin Davies.  

Contact continues to advance further battery investment options and has also been granted consent to build another 100 MW grid scale battery in Stratford, Taranaki.