Australian solar company signs historic deal to help “entire country” quit diesel power

One of Australia’s leading commercial solar and energy services companies has signed an historic deal with the world’s smallest island to help slash its dependence on costly and polluting diesel fuel.

Sydney-based Smart Commercial Energy on Thursday signed a Memorandum of Understanding (MOU) with the Republic of Nauru, following negotiations that were concluded on the sidelines of the Smart Energy Conference in Sydney.

Nauru, one of Australia’s Pacific island neighbours that is highly vulnerable to the impacts of global warming, uses around 8 million litres of imported diesel fuel a year to power its population of around 13,000 people.

The MOU with Smart Commercial Energy includes an 18 megawatt (MW) solar and 40 megawatt-hour (MWh) battery storage system, to help meet Nauru’s annual energy load of around 40 gigawatt-hours per year, with a standing load of around 2 MW and peak demand reaching 4.5 MW.

Smart Commercial Energy (Smart) says the project will differ from traditional aid-funded infrastructure models, using instead a commercial Power Purchase Agreement (PPA) that will see the system funded, built and operated by Smart, with the option for it to be bought out by Nauru’s government.

Smart CEO and founder Huon Hoogesteger says the unorthodox funding approach us not the only thing that is unusual about the deal.

“Signing an MOU with an entire country is not something you do every day,” Hoogesteger said on Thursday. Although it certainly aligns with the company’s growing work across the Pacific.

“The Pacific faces some unique energy challenges, particularly around diesel reliance and energy security.

“We’re proud to be working alongside Nauru and grateful to the Smart Energy Council for helping bring this opportunity together.”

Smart says the MOU marks the start of further technical and commercial investigations between the parties.