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ARENA-backed Manildra Solar Farm reaches financial close

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A 48.5MW solar farm being built by US solar developer and module manufacturer First Solar in central western New South Wales has reached financial close, becoming the latest project selected from ARENA’s groundbreaking large-scale solar competitive round to do so.

Large wind and solar farms can be planned and built in 2-3 years (compared with 10-15 years for nuclear) and are ready now to replace fossil and nuclear electricity. Photo: Brookhaven National Laboratory via Flickr (CC BY-NC-ND)

First Solar said on Monday that the project had reached financial close, an achievement that comes less than four months after the company signed with EnergyAustralia to buy the output from the solar farm, as part of a 13-year Power Purchase Agreement.

At the time, First Solar’s head of Australian development Jack Curtis said he could not reveal the pricing details of the Manildra PPA, but said unsubsidised solar projects were currently priced at around $80-$90/MWh.

Curtis said the ARENA funding round – Manildra was supported by $9.8 million of grant funding from the Australian Renewable Energy Agency – had helped a recent crop of solar projects meet that target band, but also noted that costs in Australia were falling quickly with the establishment of new solar supply chains and manufacturing and installation efficiency.

“Today’s milestone is a testament to the ability and experience of First Solar’s development and delivery team, and we congratulate ARENA and EnergyAustralia on their commitment to commercially viable projects,” saidCurtis.

“We have witnessed unprecedented cost reductions in large-scale solar in recent years. As the appetite for this asset class continues to grow, timely and reliable project delivery will be the strongest driver of future cost reductions, cementing solar as a competitive energy source in Australia,” he said.

EnergyAustralia managing director Catherine Tanna described the Manildra Solar Farm as a great example of the projects that would underpin the future of energy in Australia – the company has also recently signed PPAs for a 113MW wind farm in NSW, a 60MW solar project in Victoria and a 142MW solar farm in Queensland.

“Customers rightly expect access to reliable, affordable and cleaner supplies of energy which means the industry needs to evolve,” Tanna said in a statement on Monday.

First Solar said RCR O’Donnell Griffin had been appointed for the engineering, procurement and construction of the project, the latter of which is set to begin within months.

“Construction will soon begin at the site, creating new economic opportunities for Australian businesses and families in the local region,” ARENA CEO Ivor Frischknecht said of the Manildra project.

“By supporting innovators like First Solar, ARENA has fast-tracked the development of substantial new Australian industries like the large-scale solar sector, which is now on the cusp of being commercial.”  

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  • Tom

    If PPAs are around the “$80-$90/MWh” mark, I wonder what return on capital the company that builds the array and receives the payments is? ie, what it would cost them per MWh to actually build?

    Let’s consider a 100MW fixed solar plant – it would produce a long-term average output of around 15MW (depending on where it is it might be a bit more), hence approx. 130GWh per year. At $80/MWh over 20 years this will yield them a total of $208 million over 20 years.

    If it costs $130 million to build and maintain it, then it would yield a return of 8% pa, but as the PPA only goes for 20 years it would actually only return 3.9%pa, assuming the cost is written off at the end of 20 years.

    To yield 8%pa (at $80/MWh) assuming it is a write-off after 20 years it would need to be built and maintained for $80 million.

    I wonder how much it actually does cost to build and maintain. A government or network might be better off just forking out and building one themselves for $80 million rather than paying a private company $208 million over 20 years for the capital and risk.

    • David leitch

      In the USA unsubsidised wind PPA prices are now around US$40 = A$55 MWh. There is no reason prices in Australia couldn’t be about the same with the right sort of support. That’s wind. PV prices are moving quickly but I suspect still above wind in Victoria/South Australia/Tasmania

    • Ren Stimpy

      “maintain”? – these structures with zero fuel costs?

      • Tom

        Well, you know – some electrical engineers to fix any breakdowns, a few guys with squeegee mops to keep the panels shiny, a couple of ride-on lawnmowers to keep the weeds down between arrays – all that sort of stuff.

    • Peter F

      I can’t find the reference but I have seen utility solar in the South West US at 30% CF i.e double the number you have used

      • Brian Tehan

        It’s about 16% in Melbourne, not the sunniest place in Australia, so I would expect any solar farm, which is always placed in a very sunny area, to do much better than that.

      • Tom

        The capacity factor (although not completely irrelevant) is slightly irrelevant if you’re talking about a PPA. If you’ve got a dual-axis tracker with a capacity factor of 30% and the capital costs are the same as for twice as many panels in a fixed array with a capacity factor of 15%, then the ROC at the same PPA price will be the same.