Article by Angela Macdonald-Smith, courtesy of The Australian Financial Review.
11.11.2025
The world’s most powerful battery storage project under construction north of Sydney has been hit by a major failure of one of three giant transformers, creating a significant headache for the BlackRock-owned developer and putting pressure on the transition away from coal power.
The $1 billion Waratah super battery is being built by Akaysha Energy on the site of the former Munmorah coal power station near Budgewoi. An internal memo sent by the chief executive of the BlackRock-owned business, Nick Carter, says the transformer suffered a “catastrophic failure” last month.
The battery is a key part of NSW’s transition away from fossil fuels, and was due to be fully operational by late this year. The state government designated the project as critical infrastructure in 2022, saying it was “the most suitable solution that could be delivered in time to ensure the security of supply to Sydney, Wollongong and Newcastle” as coal generators close.
The nearby Eraring coal plant, run by Origin Energy, had been scheduled to shut by August this year. Instead, it will run until at least August 2027 as the construction of secure replacement renewable power is delayed by planning disputes, construction issues and the high cost of materials.
The Waratah transformer failure is the latest delay to affect the clean energy projects and transmission lines needed for the transition away from fossil fuels.
The Snowy 2.0 pumped hydro scheme has suffered significant cost blowouts and delays. Its owner, Snowy Hydro, said last month that it would now cost an undetermined amount beyond its already-increased $12 billion budget.
These delays mean the rate of renewable generation and storage construction is well below the rate needed to meet the federal government’s 2030 and 2035 emission reduction and clean power targets. Australia is aiming to reduce carbon emissions by 43 per cent by 2030 from 2005 levels, underpinned by an 82 per cent share for renewables in the electricity supply mix. By 2035 CO2 emissions are targeted to be between 62 and 70 per cent lower than in 2005.
In his email to Akaysha employees last month, Carter said that Waratah had suffered “damage to the transformer, and it is beyond repair”. A second transformer has been taken offline to test whether it “can be re-energised safely or may need replacement”, according to another message, circulated by Akaysha’s managing director for international markets, Tony Fullelove.
The Waratah battery will be able to supply 970,000 homes with electricity for one hour or fully charge 45.95 million smartphones when running at full capacity. It is intended to play a key role in mitigating spikes in electricity prices by smoothing out power generated by solar and wind farms. With a total capacity of 850 megawatts, and storage of 1680 megawatt-hours, the Waratah battery could run at full power for almost two hours.
According to the Australian Energy Market Operator’s data, the battery is now scheduled to be fully operational in May. However, order times for the transformers needed on large battery storage projects like Waratah have stretched out to more than a year amid surging demand.
Akaysha said it had advised the energy market operator of the outage, noting that the battery system was still partially operational.
“Akaysha notified the energy market of a temporary loss of capacity at the battery due to a transformer outage,” a spokeswoman said, adding that issues with the two transformers had been identified while Waratah was being tested ahead of moving to full capacity. The remaining capacity of the battery was now expected online during 2026.
“There is no impact to the NSW electricity grid as the [battery] remains operational and continues to meet its … service requirements,” she said.
Josh Stabler, managing director of advisory firm Energy Edge, said the Waratah development was the largest battery in the electricity market. “It is a material – about 10 per cent – component to the market but unlikely to affect any of AEMO’s reliability assessments for summer,” he said.
Transformers play an essential role in grid-scale batteries to ensure the correct voltage levels between different parts of the system and the grid, and are used to charge and discharge energy. Wilson Transformer, which supplied the three transformers at Waratah, needed nine days to transport the third, 170-tonne unit from its Glen Waverley site in Victoria.
Wilson said it was supporting an investigation into the issues at the two transformers and “working closely with its project partners to undertake a detailed inspection and analysis to determine the root cause”. “This process requires thorough investigation which may take some time,” it said.
In the memo, Carter said everyone involved was “bitterly disappointed” by the failure of the transformer, given the battery was in the final stages of testing.
The Waratah battery, the biggest in Akaysha’s growing portfolio, was funded by a capital raising of more than $500 million by BlackRock, which included $100 million from the government’s Clean Energy Finance Corporation, as well as overseas and Australian institutional investors such as NGS Super.
The performance of the Waratah battery came under scrutiny last month just days after it recorded its first full output to the electricity market, after a sharp drop in its operations. The significant reduction in capacity from the loss of one or two of the development’s three transformers could have a material impact on the project’s profitability.
The two affected transformers are undergoing detailed engineering inspection and rectification works at the Munmorah site.