AGL Energy (ASX:AGL) has approved the AU$800 million Tomago battery project, a 500 megawatt grid-scale battery in the Hunter Region, with construction set to begin later this year and operations expected by late 2027, according to a Thursday Australian bourse filing.

The battery is expected to have a 20-year operational lifespan, the filing said.

The company has engaged Fluence for engineering, procurement, and construction, and will finance the project through its balance sheet using operating cash flows and existing debt facilities, including green capital expenditure loans, the filing added.