Australia’s biggest solar farm has a highly profitable first quarter after construction delays

Australia’s biggest solar farm – the 400 MW New England facility in northern NSW – has had a highly profitable first quarter, according to a recent investor presentation from the company’s Philippine-based owners.

The New England solar farm, located near Uralla in northern NSW, had equal ranking as the biggest solar farm with the Western Downs facility owned by Neoen in Queensland. But New England will soon have undisputed title rights with the 320 MW second stage of the facility now under construction and coming on line.

The project is owned by Acen Australia, part of the listed Acen energy group that is controlled by Philippines property giant Ayala Corp

Its analysts presentation last month for the first quarter reveals that the first stage of the New England solar farm, operating at full capacity by the end of the quarter, reported revenue of 960 million Philippine pesos from production of 262 gigawatt hours.

That translates to revenue of $A24.6 million, or just under $A94 a megawatt hour, a pretty handy return given it is likely to be vastly superior to the cost of solar power.

Indeed, the solar farm’s earnings for the quarter were put at PP906 million, or $A23.3 million. Margins are pretty high when the cost of the “fuel” is zero, but that number is before interest, tax and depreciation, where the vast majority of solar farm project costs are borne.

Indeed, the company earlier this year reported a significant loss of 1.1 billion Philippine peso loss of anticipated earnings (around $A30 million) from the New England solar farm because of construction delays caused by heavy rains.

The revenue from the New England solar facility in the March quarter is similar to the $97/MWh earned over the same period by the 50 MW Jemalong solar farm, the only NSW solar project whose details are revealed by a listed company, in this case the soon to be delisted Genex Power.

It is also a significant lift from the average revenue in 2023, when the company earned just $43/MWh from production as the project ramped up and sought to complete the commissioning process.

Acen has a contract with Smartest Solar for around one quarter of the output of the first phase of the New England solar farm and its report says 35 per cent of the output of the solar farm is now contracted.

The New England solar projects have also landed long term energy service agreements (LTSEAs) with the NSW state government, which serve as a sort of underwriting deal to protect from low prices falling below around $35/MWh.

Acen was also successful in the NSW LTSEA auction with another 400 MW solar project, the Stubbo solar farm in western NSW, which the company says was 57 per cent complete as at the end of March.

The company is also beginning construction of a 200 MW, 400 MWh battery at the New England site, as part of a joint partnership with Marubeni. It has a total target of 8 GW of renewable energy and storage project proposals in Australia.