RES Australia says it has begun construction on the 68MW Emerald Solar Park in the heart of Queensland’s coal country after the project reached financial close on Monday.
The Emerald solar farm is a significant project for Australia’s solar industry, as it is the first independently owned solar farm to strike a power purchase agreement with a major Australian corporate.
Telstra signed a long term contract for the output of Emerald, which it says will be the first of many investments in large scale solar to help offset the high cost of its energy consumption, which accounts for nearly 1 per cent of Australia’s total demand.
Another major corporate has invested in solar, the Queensland-based zinc refiner Sun Metals, but it has chosen to own the 116MW project itself.
Corporate offtakes are expected to be a key mechanism for new large scale wind and solar farms, particularly if the Coalition government succeeds in implementing its National Energy Guarantee, which critics say will kill the merchant market and put the buying power back into the hands of the incumbent utilities, whose main interest is to protect their coal and gas assets.
As part of the financial close, RES Australia sold Emerald to the solar farm and battery storage investor Lighthouse Solar Fund, but will continue to manage the project, and has appointed RCR O’Donnell Griffin to do the construction.
NAB and Westpac provided the loan finance for the solar farm.
“We are delighted to announce the project will now proceed into construction immediately and are looking forward to a long term partnership with the experienced team at Lighthouse Infrastructure,” RES Australia Chief Operating Officer, Matt Rebbeck said in a statement.
The project will create 150-200 direct jobs and 320 indirect positions in Queensland’s Central Highlands region during the construction phase, with up 275,000 solar panels being installed as part of the project located west of the town of Emerald.
It is expected that construction of the project will take less than 12 months to complete. It was to be a 72MW project, but is believed to have been sized down following a recent crackdown by the Australian Energy Market Operator.
Other projects have been delayed or suffered similar “deratings”, including the Gullen Range solar farm which is now rated at 9MW rather than 10MW following an AEMO ruling on “continuous uninterruptible” supply.
The effect of this ruling requires solar projects to carry either more inverter capacity or to de-rate their nominal capacity.
Norton Rose Fullbright were lead advisor on the deal for RES with financial advisory provided by Ironstone Capital. Lighthouse Infrastructure was advised by RBC Capital Markets and King & Wood Mallesons.
RES Australia has also built the 107MW Taralga Wind Farm in NSW and the 240MW Ararat Wind Farm in Victoria.
