Victoria will soon be home to the largest lithium-ion batteries in the southern hemisphere as part of a state government push to transition to renewable energy.

The battery, set to be located in Geelong, will have a power capacity of 300 megawatts and a storage capacity of 450 megawatt-hours, making it twice the size of the battery at Hornsdale in South Australia, which was the world’s biggest when completed in 2017.

Renewable energy company Neoen, which won a contract to build the battery using Tesla equipment, will pay for construction of the battery, as well its ongoing operation and maintenance.

It is expected to store enough energy to run about 500,000 homes for half an hour.

Minister for energy Lily D’Ambrosio said the benefits were two-fold, injecting economic stimulus as the state emerges from the "deep recesses of Covid".

“The big battery will help protect our network in summer, create jobs and drive down energy prices—as well as supporting our recovery from the coronavirus pandemic.”

“Victoria is embracing new technologies that will unlock more renewable energy projects than ever before –delivering clean, cheap, reliable power to all Victorians,” D’Ambrosio said.

The state government is aiming to source 40 per cent of the state’s electricity from renewable energy by 2025, and 50 per cent by 2030.

D'Ambrosio was not able to state how much Victorian households and businesses would save on power bills once the battery was operational but said independent analysis indicated for every $1 invested in the battery will deliver more than $2 in benefits.

The $84 million investment is expected to create more than 80 construction jobs and six full-time positions once it is built.

The $200 million battery, which will be built near the Moorabool Terminal Station, is expected to be ready by November 2021.

The introduction of another large battery into the grid will further chip away at the extent to which it relies on gas-fired power.

In a push to transition of the state’s coal-dominated energy system to lower-carbon supply, the NSW government last month announced plans for a $61.9 million Tesla battery to be built at the Wallgrove substation in Sydney’s west.

The battery will have a capacity of 50 megawatts and 75 megawatt-hours.

Several other major batteries are planned in NSW, including some 500 MW of storage proposed by AGL Energy in the Hunter Valley, and by Maoneng, which is due to install four large batteries each with a capacity of 50 MW and 100 MWh.