CEFC jumps back into solar market as cost hikes put 82 pct renewable target at risk

The federal government’s Clean Energy Finance Corp has made a big leap back into the large scale solar market, committing $100 million of debt to a new 300MW solar project as rising costs threaten to push Australia’s 82 per cent renewables target out of reach.

The backing for the Walla Walla solar project, to be built by FRV Australia near Albury in NSW, is the largest solar farm to be project financed by the CEFC and its third investment in large scale wind and solar generation in two months.

CEFC chief executive Ian Learmonth says the wind and solar sectors are facing economic headwinds just as the pace of deployment needs to accelerate.

“If Australia is to meet its new emissions reduction goals and renewable energy targets we must urgently step up our development of large scale wind and solar,” he said in a statement.

The investment takes CEFC commitments to wind and solar to more than $3 billion, delivering an additional 5.1GW of capacity. Its recent support includes TagEnergy’s 765MW Golden Plains wind project in Victoria and a pipeline of projects by Acen Energy, including the Stobbo solar farm.

“The Walla Walla solar farm transaction marks an important contribution to the decarbonisation of the electricity sector as Australia pursues 82 per cent renewable energy generation by 2030,” Learmonth said.

“The large-scale renewable energy projects that CEFC finance is helping deliver enable Australia to capitalise on its abundant natural resources to decarbonise the grid, replace retiring coal generation and generate the clean, green energy that will power Australian homes and businesses in the 21st century.”

FRV is backed by Saudi investment firm Abdul Latif Jameel Energy and Canadian fund Omers. It has already developed and built almost 800MWdc of Australian solar PV assets across nine projects, including the Metz solar farm pictured above.

The Walla Walla solar farm has a 15-year power purchase agreement with Microsoft to provide renewable energy to its data centres in Australia. It is located four kms north of and is being built on the traditional land of the Wiradjuri people. It will be built by Gransolar and Chint Solar.

FRV Australia CEO Carlo Frigerio said the CEFC finance, along with funding from ING, and the Export Development Canada in the form of a green loan, had enabled the company to reach financial close on the project.

“The CEFC debt facility is key to deliver our largest solar farm in the country despite the procurement challenges which affected our industry during the past year,” he said in a statement.

Federal energy minister Chris Bowen said renewables remain the cheapest form of energy, a point highlighted by the latest CSIRO GenCost report, which noted that price rises in solar in the last 12 months were lower than for all fossil fuel technologies.

“Australia will need to install more than 60 million, five-hundred watt solar panels by 2030 to achieve our emissions reduction targets,” Bowen said. “There are more than half a million panels in this project alone, and we have many more in our sights.”

See also: FRV to build two grid forming battery storage projects in Victoria