The dispute between the owners, contractors and suppliers of one of the biggest solar farms in NSW, the 200MW Sunraysia project, has gone to arbitration after the much delayed solar farm finally gained registration and began its commissioning process.
The various parties have been at loggerheads over who should shoulder the blame, and the costs and lost revenue, from the delays to the Sunraysia solar project, which is running at least a year late.
It finally gained its R1 registration from the Australian Energy Market Operator late last year, and is currently in the commissioning process, with lead contractor Decmil indicating on Wednesday that it may take until September to complete.
As reported previously in RenewEconomy, Decmil has been embroiled in claim and counter claim with the project owners (John Laing 90 per cent, Maoneng 10 per cent), and with the inverter supplier Schneider Electric.
The dispute has caused Decmil to follow other major contractors by withdrawing from full EPC contracting in the wind and solar industry, although it remains keen for balance of plant contracts with no connection risks, and recently landed a contract with the Ryan’s Corner wind project in Victoria.
Decmil has faced a claim of $28 million in “liquidated damages” from the owners of Sunraysia as a result of the delays, but has a counter-claim for $19 million for its milestone payments once the R2 testing is concluded.
In its half yearly presentation made to the market on Wednesday, Decmil said the dispute concerns claims for extensions of time, variations, payment of liquidated damages, return and reinstatement of security and claims concerning alleged defects.
“Decmil claims the deduction of liquidated damages, recourse to security and set-off is wrongful,” it said.
In relation to Schneider, it said that its claim (previously quantified at $28 million) would be triggered if it is determined that the invertors supplied are defective (and therefore a concurrent delay).
Despite all this, Decmil sees strong growth in large scale renewable, and opportunities created by the exit of Downer, Biosar, RCR) “because they have been unable to get comfortable with the increased risk profile associated with such projects.”
RCR collapsed under the weight and cost of multiple delayed solar projects, Biosar quit Australia and Downer also made a dramatic withdrawal from the industry.
“Decmil will only accept balance of plant projects in renewables sector and is very careful to avoid any interconnection risks,” it noted in the latest presentation.
John Laing has previously revealed £43 million ($A79 million) in losses from the Sunraysia and Finley solar farms in NSW – Finley has also been hit by grid congestion issues that could curtail its output at certain times – and has withdrawn the assets from sale until the problems are resolved.
John Laing has stopped all new investment in renewables in Australia and has put its assets up for sale, although the process for the two solar projects is on hold pending clarity over the output.