Network company Spark Infrastructure says its first large scale renewable energy project – the 100MW Bomen solar farm near Wagga Wagga – is mechanically complete and will begin earning revenue soon, but it is cautious about new investments due to the curtailment and grid congestion issues.
The purchase of the Bomen solar farm last year was a significant move for Spark Infrastructure, whose business is largely based around highly regulated network investments, with big outlays and low but reliable returns,
Spark is clearly interested in buying and building new renewable energy projects, both wind and solar, along with battery storage, to tap further into the transition to renewables. And this business, along with its contracting group Beon Energy Solutions, offers higher growth, if higher risk, than its conventional poles and wires.
CEO Rick Francis says the Bomen solar farm, featuring 310,000 Jinko bi-facial panels and located about 10kms north of Wagga Wagga, completed construction earlier this month and expects to export its first power, and collect its first revenues, from early March. Full commissioning is expected by the end of June, suggesting it expects none of the delays that have hit many other grid scale wind and solar projects.
Bomen has contracts with Flow Power and Westpac Banking Corp, and will supply electricity to customers such as the Sydney Opera House, Ascham School and industrial group Molycorp among others, through those contracts.
Spark expects revenue of around $13.5 million a year from the Bomen solar farm, which translates into a megawatt hour price of less than $60/MWh, including large-scale renewable energy certificates (LGCs).
To put that into context, that compares with the average NSW pool price of more than $80/MWh over the last three years. Even counting the so-called “subsidy” from the LGCs the power is still being offered at a big discount to the NSW pool price, which is largely set by the state’s black coal generators.
Francis noted the curtailment of five solar farms in north western Victoria and south west NSW that had their output curtailed by half due to the “weak” network. Other mostly completed large scale renewable energy projects in the same area have had their connections delayed by up to a year, while others have been warned to wait up to 7 years for a connection.
RES has been appointed asset manager of the $188 million Bomen solar project, while Beon Energy Solutions – which built the plant – will be the O&M contractor.