German energy giant Innogy buys two huge Australia solar projects

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German energy giant Innogy enters Australia market, buying two large solar projects and on the lookout for wind projects and battery storage.

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German energy giant Innogy has made its first move into Australia’s burgeoning utility-scale solar market, buying two undeveloped projects totalling more than 460MW, and signalling further investments in wind and battery storage.

Innogy’s purchase of the two NSW projects – Limondale and Hillston – from local developer Overland Sun Farming signals that the Australia solar boom is far from over.

Innogy intends to start building the two projects in 2018, at a total cost of around $620 million, and is on the lookout for more solar, wind and storage opportunities.

“With the acquisition of two of Overland’s Australian solar development projects, innogy is entering into a strongly growing renewable energy market,” CEO Uwe Tigges said in a statement.

“This is a perfect fit with our strategy to deliver sustainable bottom line growth in accordance with innogy’s financial targets to maximise value for the company and our shareholders. Execution of the two photovoltaic power plant projects is in line with Innogy’s hurdle rate framework and funding capacity.”

Innogy is not just any old energy firm. It is 75 per cent owned by Germany’s RWE, one of Europe’s biggest energy utilities, and boasts annual revenues of more than $A70 billion.

The company’s “old assets” such a coal and nuclear generation were left behind in RWE, while Innogy holds the so-called “future” energy businesses – renewables, network and retail businesses – that will focus on a “modern, decarbonised, decentralised and digital energy world.”

The Australian acquisition follows Innogy’s deal in December to buy more than 2GW of onshore wind power projects  in the United States, its first move into the world’s second biggest wind market.

Innogy will set up an Australian-based team, most likely in Melbourne, to pursue solar, wind and battery storage projects. It recently bought the German-based solar and battery storage specialist Belectric, which has built one small solar farm in Australia but whose technology is also used.

“Australia is the continent with the highest solar irradiation per square meter. Australia is an excellent starting point for innogy to grow a valuable solar business,” said COO Hans Bünting,

The 347MW Limondale project, near Balranald, will be first of the rank, with construction works due to  start in the second quarter of this year. Full commercial operation is expected by the end of 2019.

The 115MW Hillston project, north of Hay in the south-west of the state, is expected to begin construction by the third quarter and be in full commercial operation by the end of 2019.

 

 

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9 Comments
  1. Steve159 2 years ago

    AGL will be ecstatic — with the influx of all this solar they might be able to decommission their aging clunker (Liddell) earlier than slated. And save millions in maintenance costs.

    • GlennM 2 years ago

      Yes expect to see a PPA announcement before the end of the year. It seems that “the market” is providing all AGL will need

      • Steve159 2 years ago

        Agree, as a gen-tailer, they can shift their generation from that clunker to PPAs, and retail same as, smooth as. Question is if under present settlement rules, whether the mountain of cash they’re earning (when Liddell is running) is out-pacing their maintenance bill, which I understand will run into hundreds of millions before it’s decommissioned. All of which is compounded by all that solar putting downward pressure on wholesale prices, undermining the viability of that clunker.

  2. Craig Allen 2 years ago

    It’s unfortunate that with Australian companies dragging the chain and focussed on coal and digging up other rocks for unprocessed export we’ll end up with a large chunk of our power generation owned by foreign companies

    • Rod 2 years ago

      We have so much capital in this Country looking for a place to call home and these projects returning 7%-10% would be snapped up by local investors.

      • solarguy 2 years ago

        Don’t you mean, should be snapped up local investors?

        • Rod 2 years ago

          Yes, opportunities are there via ethical funds. I would prefer direct investment. I had a look at clearsky (but missed the last opportunity window)
          I think an aggregated investment into tracking solar farms would be a great investment.

          • solarguy 2 years ago

            Sounds like a good idea if it checks out, especially if it has storage!

            Now you have me thinking.

  3. Roger Franklin 2 years ago

    Always wondered why our superannuation funds are not getting into funding renewable energy projects? Anyone have any idea’s? Getting tired of reading about how our next generation of power companies are all being bought by foreign companies.

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