It will be a first for the south-west, with the 100MW project one of two battery projects that have been mooted for the town in recent years.

Spanish firm Fotowatio Renewable Ventures - which secured a $7 million boost from the state government on Tuesday for the project - will build and operate the facility which was started by ACEnergy.

ACEnergy first mooted the battery project for Terang in April last year. The ACEnergy plan to build a battery storage system using 78 shipping containers on 1.4 hectares next to the Littles Lane Terang Terminal Station was given planning approval by the state government in 2021 when the minister intervened.

The project involves housing lithium ion phosphate batteries in the shipping containers storing up to 100 megawatt of surplus electricity to dispatch at times of high demand or grid instability and hold surplus energy from the region's wind farms.

FRV spokesman Juan Gonzales said it would continue to work with ACEnergy on finalising the permitting and connection of the project.

Mr Gonzales said the connection was yet to be approved with the hope it would happen sometime this summer.

He said works on site were expected to start sometime in the second half of next year with construction set to take about a year.

"By the end of 2024 it should be operational," he said.

The project will create 50 construction and five permanent jobs.

The plan is to install a 100 megawatt, two-hour lithium-ion battery energy storage system using new grid-forming inverters.

Mr Gonzales said the battery would provide flexibility to the grid.

FRV arrived on Australia's renewable energy scene in 2001 and has a portfolio which includes more than 800MW solar projects - the second largest in Australia.

The $235 million Tilt project - a 196MW/392MWh battery - in Terang is expected to create 165 full-time equivalent jobs during construction and a further 11 during operations.

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