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Gupta lifts planned solar rollout to more than 1GW, advances own big battery

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UK billionaire Sanjeev Gupta, the new owner of the Whyalla steelworks and the OneSteel business, has kicked off his plans for a massive roll-out more than 1 gigawatt (GW) of solar in Australia, and is also advancing plans for his own “big battery” and pumped hydro storage.

Gupta’s vision for a major solar and storage investment were flagged when his GFG Alliance bought the failed OneSteel business last year, arguing that a switch to green energy was critical to save the Whyalla steelworks and underpin the future of major steel plants in NSW and Victoria.

The rollout of solar is now targeting more than 1GW in South Australia alone, to tap into the state’s “extraordinary solar resource”, according to Liam Reid, the head of project development at SIMEC Energy, the energy offshoot of GFG Alliance.

The scale of Gupta’s ambition is enormous in the Australian context, and particularly significant given the fact that it is being driven by one of the country’s biggest energy consumers.

The rollout has already started with an offer to the company’s 6,000 employees in Australia to put solar and batteries in their homes in exchange for salary sacrifice.

This will help GFG Alliance employees to save on electricity costs. Registrations of interest are taking place and it is said to be “getting some traction.”

There are also plans for 40MW of rooftop solar installations at 80 different company locations around Australia, including a 10MW facility at the Newcastle Wire Mill.

On top of this, GFG plans its first 80MW large-scale solar farm near Whyalla – to supply the local steel works – and this is expected to get final investment approval within the next couple of months.

All of these initial installations will be “behind the meter”, meaning they will supply only the employees, the industrial facilities, or the Whyalla Steelworks. They will be managed by SIMEC ZEN Energy, its newly merged Australian solar and storage business.

These installations will be followed by yet more solar at Whyalla – up to 200MW of grid connected solar on GFG land – and then elsewhere, and by battery and pumped hydro storage installations.

Reid says the company is close to finalising the first of its own “big battery” installations, likely to be a 120MW/140MWh lithium-ion battery storage facility near the Davenport sub station near Port Augusta.

This would be bigger than the so-called Tesla big battery – currently the world’s biggest – and would help support yet more large-scale solar in the state.

“We are aiming for 1GW+ (of solar) in the medium term for South Australia, capitalising on South Australia’s extraordinary solar resource,” Reid said in a presentation to a South Australian Future Energy conference in Adelaide on Wednesday, just days before the state election.

“As the cost of renewable energy declines, South Australia’s abundant energy resources can be used to scale up SA’s energy-intensive skilled manufacturing industries.”

He said Australia should be a global leader in metals manufacturing, and a key component of this would be lower energy costs, delivered by wind, solar and storage.

“The cost of renewables is continually dropping – they are now viable alternatives to conventional fuels,” he said.

“SIMEC Energy’s goal is to supply this energy to its GFG siblings with an optimised mix of large-scale and distributed technologies … then build a business serving a wider group of industrial customers with similar needs.

“With growth comes more opportunity, more learning and reduced costs – it’s a portfolio approach that helps make SA’s energy transformation faster and grow further to take advantage of South Australia’s “extraordinary solar resource”.

The company’s plans for both large and small-scale solar confirm that South Australia is heading for 75 per cent renewable energy share, regardless of Premier Jay Weatherill’s newly announced target, or the reluctance of the Liberal Party.

Indeed, even the Australian Energy Market Operator sees the state’s renewable energy share reaching 73 per cent by 2020/21.

Apart from Gupta’s plans, there are major solar projects under construction at Port Augusta (220MW) and Tailem Bend (117MW), a large wind farm at Port Augusta (212MW), and numerous other wind, solar and storage projects.

Gupta’s vision of a major industrial group powered by solar and storage runs contrary to repeated criticism of renewable energy as an expensive “economy wrecker”. It is more likely to be an economy saver.

Reid says the company expects to build enough solar to cater for both its own energy needs and for third parties.

“If the price is low enough for GFG, it’s likely to be low enough to supply third parties with any excess generation,” he says.

“A customer-led self supply “pull” should help make better decisions than a standardised generator/retailer “push”,” he noted.

Reid also spoke of the proposed 90MW/390MWh of pumped hydro storage at the depleted Iron Duchess ore pit in the South Middleback Range, about 50km from Whyalla.

The concept study is complete, further studies are being funded by the South Australian and federal governments, and GFG hopes to complete the “first-of-its-kind” project by 2022. Reid says it could be replicated at other GFG mine sites such as Iron Baron or Iron Knob.

  

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  • Joe

    A novel approach to salary sacrifice…’here have the home solar and home battery’.

    • Rod

      Morriscum will be beside himself with rage.

      • Joe

        …he’s still getting over the dividend imputation issue. Looks like ‘Lump of Coal Scotty’ is on another ‘loser’.

        • Rod

          The problem with dividend imputation credits is they are hard to explain to your average regressive and liable to idiotic scare campaigns. The Mudrake Advertiser has “Labor attacks pensioners” For fox sake!

          • Joe

            That would be the same lot of pensioners that Lumpy Scotty wants to rip the ‘Energy Supplement’ from !

          • Rod

            The Mad Monk didn’t have the guts to take it away from those who get it. Morriscum wants to make sure no-one new starts getting it.

          • Joe

            It’s class warfare with the energy supplement then…the pensioners that have vs the pensioners that have not. Gotta luv the Scotty’s thinking…an election winner!.

          • Tom

            I’ll give Bill a helping hand:

            “Tax on a company’s profits should not be paid twice, but it absolutely should be paid once.”

            Poor old Bill Shorten couldn’t sell a fish to an Eskimo.

          • Rod

            Well, he is right. If the company pays it once (to the Government) and then the Government gives the cash credit back to someone who pays no tax the government gets no tax.

          • Tom

            @ Rod – That’s exactly what I mean. If the company pays the tax, then the tax is paid, and it shouldn’t be paid a second time.

            But DON’T GIVE IT BACK just because a multi-millionaire pensioner is in a low tax bracket.

          • Brian Tehan

            Normally you can’t claim a tax deduction if you’re not paying tax. For example I can only claim deductions on a rental property up to my taxable income, if I’m getting an untaxed pension.

          • Joe

            Its ‘Helicopter Cash’ for The COALition Fanboy voters which Costello brought in as Treasurer. Wage earners who have bank savings built from their taxed wages get no ‘tax refund’ on the tax they pay on the interest earned from their bank savings. Two rules applying here. But I guess it’s okay to treat workers as collateral damage.

          • Rod

            Ah OK. I assumed the quote was something KirriBilly had said.

          • john

            Well there is a point to this.
            Imputation Credits means if a taxpayer has a dividend the said taxpayer can claim the previously paid tax on the dividend.
            It is at the company tax rate which would be lower than a taxpayers rate so the taxpayer will still pay tax.
            Correct me if i am wrong on the rate please.
            Especially if the 21% rate comes in.

          • Rod

            Dividend imputation will remain (30%) and be available to reduce tax.
            What is being changed is tax credit (cash) for those who pay no tax. Most affected will be those with a very high balance SMSF. Super funds aren’t affected.
            I guess there may be some pensioners who have direct shares paying a credit.
            I need to see some income figure scenarios to get my head around it.

    • Jon

      Very clever, help your employees whilst helping your own business.

      Hopefully the pumped hydro and big battery both get up as well as all their behind the meter generation.

      Are the pumped hydro and bigger battery projects behind the meter or in front of the meter?

      • Stephen

        I’m actually a tiny bit confused though. How does this help the business? I get how providing their own power can save them money, but how does letting employees salary sacrifice help?

        • I imagine the employees are buying the systems from Zen Energy – 51% owned by Mr Gupta.

          • Jon

            That was my assumption too Finn.

        • Brian Tehan

          Giving your employees a generous benefit via salary helps with employee loyalty and productivity.

    • Glynn Palmer

      There will be a fringe benefits tax issue with replacing taxable salary with goods and services.

      Say the value of the fringe benefit of PV panels is $5,000. This is grossed up by 2.0802 to give a taxable value of $10,401 which is taxed at 47% = $4,888 FBT payable on the $5,000 fringe benefit given to the employee. Therefore it costs the employer $5,000 + $4,888 = $9,888. The employer has just incurred an additional $4,888 by doing the employee a favour.

      • Glynn Palmer

        I meant to give a link to the FBT information.
        https://www.ato.gov.au/Rates/FBT/

      • Joe

        ….a bit of creative ‘Dividend Imputation Franked Credit Tax Refund’ policy making will solve that….Treasurer Scotty can help out with the finer details.

      • Jon

        It wouldn’t be a fringe benifit if employees are salary sacrificing for it.
        If the employees were given it at a discount the discount amount (difference between market value and sale value) may be hit with FBT if it can’t be shown as a volume discount or similar

        • Glynn Palmer

          Sorry Jon. The government taxes all wages and fringe benefits an employer provides to its employees. The salary sacrificed amount is not taxed because the employee has not received any value for it. But the PV system provided by the employer is taxed as a property fringe benefit.

          Property fringe benefits
          A property fringe benefit may arise when you provide your employee with property, either free or at a discount.
          For fringe benefits tax (FBT) purposes, property includes:
          all goods, for example, items of clothing, or a television
          https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/types-of-fringe-benefits/property-fringe-benefits/

          However, if Gupta has a significant investment in ZEN which purchases and sells solar systems then Zen may be regarded as an associate company and the in-house property fringe benefits rules will apply. But even with this there is no longer a concession.
          The benefit is an in-house property fringe benefit provided under a salary packaging arrangement
          The taxable value is:
          the amount that the employee could reasonably be expected to pay to obtain the property under an arm’s length transaction
          less (minus)
          any employee contribution (an employee contribution is out of after tax income)
          https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00018

  • Hettie

    Here we have Sanjeeve Gupta going for broke with renewable energy and storage.
    Great story.
    Not so great is the news from GetUp this morning that the presumed bankrupt G. Adani has discovered a lazy $19 bn in his back pocket, and could finance his abominable project himself.
    Which raises three questions.

    1. Did he know all along that the money was there, but hoped to con the Gov’t into believing he was broke, and financing the mine for him?

    2. Will he risk his own money in a project that 27 banks won’t touch because they know it’s not viable?

    3. Will Silly Billy finally man up and say that the environmental studies were deeply flawed, and that he will therefore, once in government, cancel the mining license, which the terms of the license allow him to do? Thus ensuring that GA will cut and run.

    My money (all threepence ha’penny of it) is on the answers being
    1. Yes.
    2. No way.
    3. I bloody hope so.

    Comments from the audience welcome.

    • Jon

      My money is on Adani not financing this dog of a project with his own money.
      Really think the only reason he’s hanging in with the project is so that Abbott Point doesn’t become a dead project before he needs to refinance it, which is very soon.

      • Glynn Palmer

        In April 2017 IEEFA estimated Adani Australian enterprise at a market value of $1.9 billion and debt of $2.5 billion.
        http://ieefa.org/ieefa-update-increasingly-cursed-australian-coal-project/

        • RobertO

          Hi Glynn Palmer, while it on the books Adani can keep the creditors happy, the minute the mine is stopped by Australians he will sue if he can to make up his losses.

    • Joe

      Young Hettie I must inform you that we are now in decimal currencies. Your thrippence and penny are no longer the legal tender….may be worth something as coin collector items though. Yes, I saw that report of the $19millions that Adani has stashed away for a rainy day. I’m thinking that Adani won’t be silly enough to sink his own moolah into a ‘stranded asset’ and he will walk away if no financier comes onboard. On the enviro issue Billy needs to stand up for our animal friends the Yakka Skink and the Ornamental Snake.

      • Hettie

        Now you tell me!
        A 1935 NZ threepenny bit in good condition is actually very valuable.

        • john

          Actually a 1932 penny would be worth a lot I do have a 1938 but probably worth about 15 cents

    • Ken Dyer

      Hettie make no mistake, Adani is a dead project, and no amount of money will resurrect the zombie.

      • Hettie

        I sincerely hope you are right, Ken, but I seem to remember reading last year that his finances in India depend on work starting at Carmichael.
        Mind you, that was when he was presumed bankrupt.
        I agree, though, that because with every week that passes, coal is less marketable, the project is more firmly stranded.
        IF Billy comes out and says the environmental risks are sufficient to justify cancelling the license, we can all breathe again

      • Joe

        ….nothing like a potential $1billions ‘infusion’ of taxpayer hard earned from the EFIC to pump some life into The Zombie Adani Coalmine

    • Glynn Palmer

      I think that $19 billion is what he could borrow against the value of his assets. He would be risking all his assets on the financial success of the Carmichael mine.

      • neroden

        He won’t finance it with his own money. Period. He’s just trying to set up a situation where he minimizes his losses or can recover something from the government.

  • Hettie

    In other, very sad news, Stephen Hawking died today, aged 76, on Albert Einstein’s birthday.
    Vale, one of the greatest minds and most indomitable spirits of our time.

    • solarguy

      Indeed!

  • Carl Raymond S

    How obvious must it be, that renewables boost GDP, for Turnbull and Frydenberg to see?

    • Joe

      But Joshie doesn’t see…he doesn’t have the solar at home on top his roof.

      • shiner2348

        We pay the snakes to much in saleries,from the public purse

        • Hettie

          It’s the after parliament jobs they want, the fossil fuel ones, that make them blind.
          Wankers.

    • Ian

      The LNP don’t want to see, so they wont see

  • Tom

    I so sincerely hope that “billionaire” Sanjeeve Gupta is a fair-dinkum billionaire with fair-dinkum commitment to his projects.

    I lived in Newcastle when another “billionaire” – Nathan Tinkler – bought the Newcastle Jets and the Newcastle Knights. Only to quite predictably discover that his “billionaire” status was only due to an upward glitch in the sharemarket, and that he was actually bankrupt all along.

    • Alex Clabburn

      That’s my fear as well. The GFG alliance are a pretty big operation but turnover was only around $10billion before the buying spree started. It’s hard to see how they are going to deliver on all this. He has similar stuff going on in the UK and is in the process of breaking into USA, India and France. It’s really exciting to watch but I worry there could be a pretty large house of cards being built here.

      • neroden

        Having looked into it, Gupta has successfully pulled off a conversion of bankrupt steel mills in the UK. I think the key to the scheme is buying the mills out of bankruptcy for pennies. I think he can do it….

        • Ken

          He did say they paid a not so insignificant price for the Whyalla steel mill,, but I think its the way he looks at steel production and the associated costs that is the difference.

          If energy is one of the biggest costs then by going renewable and controlling his own energy supply he can control and reduce that cost.

          The other aspect seems to be the loyalty factor.
          UK steel for UK projects, and the same over here,, Aussie steel for Aussie projects.
          But of a no brainer and good marketing.

          He seems to be more visionary which is what has been lacking in the past.

  • john

    As everyone knows this project can not get finance from any bank.
    So it is not going to get up but there is an out the company can sue the State Government or the Federal for that matter anyone else like the people who appeared in the Environmental hearings and hope to get a few thousands dollars from their bankrupt idea.

    • Robin_Harrison

      Do you have evidence of this?

      • john

        I made a mistake Adani.

    • Hettie

      Are you talking about Gupta or Adani?

      • john

        You are correct Adani.

  • Coley

    Iron Baron, Iron Dutchess, Iron Duke, Iron Knight, have looked but can’t find any knobs in Burkes peerage-:)

  • Barri Mundee

    Giles, this is off-topic, sorry.

    I have been in email contact with Solar Citizens who are in the process of crowd-funding a retail startup company called DC Power Co.
    (https://www.dcpowerco.com.au/) who shares our mission to see Australia powered by 100% renewable energy. DC Power Co. are planning to disrupt the way people buy, sell and manage power in Australia, by taking the power away from the big retailers and giving ownership to us.

    As Solar Citizens put it, the big energy retailers make a profit from the amount of energy you consume, and they want you to buy more and more at higher and higher prices. DC Power Co.’s point of difference is they will be basing their business on a membership model rather than a usage model.

    While other companies are geared around making you buy their energy – and as much of it as possible – DC Power Co. are focussed on what their members will need and helping people be more efficient in their energy usage.

    To be part of it interested people must invest $50. The funds will be held in escrow until the crowd funding goal has been reached. if the goal is not reached DC Power Co will refund the $50.

    Do you or anyone here have any views on this proposal ? Its not a lot of money but…

  • solarguy

    Good on Mr Gupta and I hope many more will follow.