Another big international company has reported significant losses from Australian solar projects, this time the Greek-based Ellaktor whose construction offshoot Biosar has been involved in half a dozen large scale solar projects in Victoria, NSW and Queensland.
The Ellaktor accounts show that it has so far this financial year taken a hit of €46.5 million ($A78 million) from Australian solar project losses and liquidated damages, which would encompass cost over-runs and penalty payments imposed by project developers to make up for lost revenue from any delays.
Ellaktor does not specify which projects caused the losses, but Biosar’s construction portfolio in Australia includes Total Eren’s Kiamal solar farm in Victoria, which has been caught up in bottlenecks in the West Murray region of the grid, the Nevertire solar farm in NSW, and the Susan River, Childers, Middlemount and Oakey 2 solar projects in Queensland.
Ellaktor is just the latest of a string of international and domestic groups that have suffered from the delays, connection problems and cost over-runs at many of Australia’s large scale solar – and wind – projects in the last couple of years.
The biggest victim has been the Australian contractor RCR Tomlinson, which collapsed under the weight of cost over-runs and liquidate damages, and its exit was followed by that of its biggest rival, Downer Group, which declared the solar industry to be too hard after also suffering significant losses.
Other contractors have also left the market, and there is speculation about the future of others, leading to concerns about a potential shortfall of EPC contractors and the impact on pricing.
As RenewEconomy reported last week, Italian energy giant Enel Green Power has revealed losses of $73 million because of delays caused by “technical problems” at its Bungala 2 solar farm in Australia, part of what would have been Australia’s biggest solar farm to date had it completed commissioning by now.
The UK-based infrastructure group John Laing has also suffered significant losses – of more than $120 million – and stopped investment in Australia and put its portfolio up for sale. It has also cited the uncertainty of the controversial and ever-changing “marginal loss factors” (relating to transmission losses), and other regulatory problems.
One of the biggest renewable energy developers in the country, Neoen, has had to impose liquidated damages due to delays at several projects, including Bulgana and its suite of western NSW solar farms, although it has had to wear some of the revenue losses from the Bulgana delay.
“In terms of operating results, operating losses were limited to €31.1 million …. and are due to a total loss of €46.5 million from the construction of PV parks in Australia,” Ellaktor wrote in its brief summary of its latest results. One local media report points to payment issues at Kiamal.
The losses from the Australian solar projects contributed to an ongoing poor run for Ellaktor’s construction division over the last two years, which recorded total losses of €42.9 million versus losses of €131.7 million in the same period a year earlier.
Ellaktor’s accounts note that the three solar parks in Queensland had a total contract value of €139 million, while the solar parks in Victoria and NSW had a total contract value of €204 million.
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