The 200MW Kiamal solar farm is not yet built, but already it is setting a pace for hosting innovative energy financing deals, the latest with the fast growing energy retailer Flow Power.
Flow Power is to contract 50MW of capacity from Kiamal, which is to be built near Ouyen in western Victoria by Total Eren, and the output will be offered to Flow Power’s business clients, along with wind power from the Ararat wind farm.
It it the third innovative deal to be announced for Kiamal, which last week contracted another 50MW of capacity to Mars Australia, allowing the food manufacturer to go 100 per cent renewables for its entire Australian business, which includes 6 factories.
Kiamal also signed a contract with another retailer, PowerShop, at a “stunning low price” that will enable it to pass on discounts to its largely household retail base.
Flow Power CEO Matthew van der Linden is equally enthused by the deal he has struck with Total Eren.
“It’s really cheap,” van der Linden told RenewEconomy. “It’s well below the rates out in the market.”
Why is that? “Because we have got a long term agreement with a large scale project and obviously they can offer a very competitive price around that.”
Flow Power concentrates on the wholesale market, and is contracting with wind and solar farms to set up “renewable corporate power purchase agreements (PPAs)” for business customers.
This structure allows them to tap cheaper renewable power and match their consumption needs, and with the proliferation of various “firming contracts” that have recently been released into the market, threatens a major disruption to the status quo.
For one, corporate customers now have a means of sourcing cheap wind and solar, and with firming products matching their demand requirements.
“The market has proven that there is an appetite in Australia for renewable PPAs,” van der Linden said.
He hopes to announce another contract soon for more wind output in Victoria, and other solar and wind projects that will allow the company to expand into New South Wales, South Australia, and Queensland.
“We hope that by the end of the year we will have 50MW plus of wind and solar in every state. that will be our goal,” he tells RenewEconomy.
“With that (portfolio), a corporate can come to you and we can match their profile with either wind or solar.
we want to change this market and get large scale corporates working on a big scale.
Kiamal Solar Farm is Flow Power’s first solar offering and the first major contract with a renewable generator since Canadian pension trust OPTrust took an ownership stake in the company in February.
“We want to change this market and get large scale corporates working on a big scale.”
The 200MW Kiamal Solar Farm is the first Australian investment from Total Eren, a joint venture that involves one of the world’s biggest.
Total Eren is a new player in the Australian market but has already signalled it is preparing to develop an un-named solar project in NSW, and aims to achieve 3000MW of installed capacity, globally, by 2022, up from 990MW now.
Construction of the Kiamal solar farm – which will feature more than 700,000 photovoltaic panels over nearly 500 hectares, will begin mid-year 2018 and will take about 12 months to complete.
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.