56MW Moree Solar Farm reaches financial closure | RenewEconomy

56MW Moree Solar Farm reaches financial closure

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A 56MW solar farm near NSW town of Moree – the first large scale solar array to use tracking in Australia – is ready to build after reaching financial closure.

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The ground-breaking 56MW solar PV farm near the NSW farming town of Moree is set to begin construction within months after finally securing financial closure this week.

The Moree Solar Farm, a scaled down version of a project that was unable to go ahead in the ill-fated Solar Flagships program, will be unique in Australia because it will be the first to include single-axis tracking on such a large scale. Tracking allows the output of the modules to be increased as they follow the sun’s movements.

The project will be partially funded by two institutions that the Australian government has tried to close down – the Clean Energy Finance Corporation and the Australian Renewable Energy Agency.

moree solar picThe CEFC announced last August that it would provide lending of up to $60 million to the project developers, Spanish group FRV and Australia’s Pacific Hydro.

Because it is deploying single axis tracking for the first time, it is also believed to have secured an unspecified grant from ARENA. This grant, while approved by the ARENA board, was subject to the developers getting financial closure. That was its biggest hurdle, and it has taken nearly a year to secure it.

That financial closure occurred on Thursday, according to NSW Environment Minister Rob Stokes, who revealed the news in an interview with ABC TV, in a discussion about his vision to turn NSW into the “California” of Australia.

“I’m delighted that just yesterday, the Moree Solar Farm … reached financial close,” he told the NSW 7.30 Report. “There are great opportunities for large scale solar.”

The Moree project may also break new ground by becoming the first in Australia to be built on a “merchant” basis – meaning that it will sell its output into the National Electricity Market, rather than rely on a contract with a major retailer.

The failure to obtain such a contract was the undoing of its earlier 150MW proposal that was approved by the government, but ultimately had its funding withdrawn when it could not reach financial closure.

It is possible that the solar farm will also contract part of its output to a local customer. Pacific Hydro also has a retail arm, which could take some or all of their output.

Moree will be the sixth large scale solar project to be built in NSW within an 18-month period. AGL Energy, which won the federal Solar Flagship funding after the failure of the initial Moree proposal, is now building a 102MW solar plant at Nyngan and a 53MW solar plant at Broken Hill.

Three smaller plants are being built within the ACT as part of the territory’s solar auction program and its bid to source 90 per cent of its electricity from renewable energy by 2020.

FRV is soon to open the first and largest of those facilities, the 20MW Royalla Solar Farm, while two others – a 13MW and a 7MW – are undergoing planning approval.

The construction of around 200MW of large scale solar will partially rectify Australia’s woeful efforts in large scale solar to date. So far, only one 10MW solar farm has been opened – in Geraldton in Western Australia – pushing Australia to the lowly rank of 30 in the world on utility scale solar installations, behind The Dominican Republic. It would need to at least triple its installations to reach the global top 10.

However, the fate of further projects – and there are dozens in the development pipeline – relies almost entirely on the result of the Abbott government’s review of the renewable energy target. If the RET is removed, or heavily diluted, as seems likely, those projects will be deferred.

This week, US solar giant Recurrrent Energy – which has a 1,500MW pipeline of solar projects in Australia, including an 80MW proposal for Queensland’s Darling Downs, said it was closing its office in Australia because of the policy uncertainty.

Other large international players have warned that investment will be directed to fast growing markets in the Americas, Africa, and Asia if the uncertainty continues.

CEFC CEO Oliver Yates said last August that building a plant on a merchant basis would be a precedent for the Australian market. He said solar energy was “more predictable” than wind energy and tracking will allow the facility to capture a higher volume of peak priced electricity.

“The CEFC financing can bridge the required debt funding in the immediate term to enable the sponsors to proceed to construction and provide flexibility to secure a PPA in the future,” Yates said in a statement at the time.

“This utility scale project should help drive down future construction costs as industry participants gain experience building large scale solar projects. The supplier selection process for this project is getting underway and the CEFC expects its participation will encourage greater development of a local supply chain.”

ARENA believes that more than half the cost difference between solar energy and wind energy can be breached by lowering the cost of finance. To do that requires more solar plants to be built. It said last year that Moree was one of two projects – along with Infigen Energy’s Capital solar farm – under consideration for funding.

The Moree Solar Farm – located 10kms north of the town – will feature high efficiency panels mounted on single-axis trackers. It will cover around 350 hectares and provide enough solar power for approximately 15,000 homes.

The Abbott government’s efforts to close CEFC and ARENA have been stymied by the Senate, although ASRNA has been stripped of much of its funding over the next three years.

In June, Parkes National Party MP Mark Coulton said he had been assured by Industry Minister Ian Macfarlane – the man responsible for ARENA – that the Moree Solar Farm was on track to meet Commonwealth funding approvals.

“The Moree Solar Farm has no reason at this stage to be fearful that the ARENA funding won’t be there,” Coulton told ABC radio.

A formal announcement on the Moree project is expected next week.

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  1. juxx0r 6 years ago

    “ARENA believes that more than half the cost difference between solar energy and wind energy can be breached by lowering the cost of finance”

    I’d bet my leftie that this project has a better return than my super fund.

  2. grantoz 6 years ago

    Absolutely disgraceful failure of government, that Recurrrent Energy with a 1,500MW pipeline of solar projects in Australia should pull out because of “policy uncertainty”. Slow clap to the Lieberals.

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