The owner of a major portfolio of utility sale solar projects says it remains hopeful that a sales agreement can be secured this year, although it has indicated it may need to throw in some battery storage to boost their earnings profile.
The Greek-based energy and industrial giant Metlen, formerly known as Mytilineos – has had the “for sale” sign out for its portfolio of operating Australian solar farms, and its development pipeline, since it retained Macquarie as an advisor in mid 2024. But is yet to secure a buyer.
In a call with analysts following its latest earnings report late last week, Metlen insisted that it expects to conclude the sale of the portfolio, along with its assets in Spain, in 2026.
CEO Christos Gavalas was asked by an analyst about the company’s asset rotation policy in countries such as Australia, Chile and Spain, and noted its efforts to add battery storage to its solar sites in Chile.
“Chile has been landmark for us. It has been hybridized,” Gavalas said. “We put batteries next to the solar, which is the answer to what the solar issue globally is and the zero pricing.
“This is the way forward, and this is the reason why we are so believers in that way for the green energy transition enabling, which is going to go through batteries and storage.
“Yes, Australia and Spain will follow. We do expect both of them to be sold this year, probably through the hybrid way, increasing the margins, increasing the PPAs, increasing the profitability, and providing an answer to that structural problem.”
Metlen has a portfolio of 527 megawatts (MW) of operating assets in Australia, the most it has in any country, plus around 183 MW of “ready to build” projects and another 345 MW of projects in late stage development.
Despite being the largest portfolio, Metlen revealed little more about the Australian assets in its annual report, other than to note that it recognised a gain of €36.2 million in the last year from the fair value movement of virtual Power Purchase Agreement contracts, primarily located in Australia.
“The fair value of PPAs is determined using discounted cash flow models, which estimate the present value of expected future cash flows over the contractual term of each PPA,” it noted.
Last year, it announced the refinancing of a portfolio of seven solar farms located across New South Wales and Queensland, including Corowa (40 MW), Junee (40 MW), Wagga (64 MW), Wyalong (75 MW), Moura (110 MW), and Kingaroy (53 MW), as well as the then soon to be completed 150 MW Munna Creek solar farm.
Solar farms have struggled on the earnings front because of the dilution of wholesale electricity prices in the middle of the day, and because many are forced to be curtailed when prices go negative.
There are now few, if any, standalone solar projects still being built in Australia, and solar-battery hybrids – where solar farms and big batteries are built behind the same connection point to store excess solar for more lucrative evening peaks – have now become the preferred project model.
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