UK “green steel” billionaire Sanjeev Gupta has signed a 15-year deal to take power from the soon-to-be built Numurkah solar farm in northern Victoria, to help power his newly acquired Laverton steel works in Victoria and reduce electricity costs.
The signing of an MOU between Gupta’s GFG Alliance, its energy offshoot SIMEC ZEN and French renewable energy developer Neoen was witnessed by prime minister Malcolm Turnbull and visiting French president Emmanuel Macron at a ceremony in Sydney on Wednesday.
The message about cheap renewables and its ability to guarantee the future of Australia’s manufacturing industry with dramatically lower electricity costs should not have been lost on either leader.
“The switch from fossil fuels to renewable energy is the revolution of this century, transforming our economics and our impact on the environment,” said Neoen president Xavier Barbaro.
“We believe renewable energy is a game-changer and (these) agreements reflect a shared commitment to deliver low-cost sustainable energy solutions to the market.”
That’s not quite the message that Turnbull and the Australian government have been promoting of late, but it’s a message that was reinforced by Gupta, who also intends to slash the cost of electricity at the Whyalla steelworks by building 1GW of solar and storage.
Those plans – with include a 120MW battery storage facility, bigger than the so-called Tesla big battery near Neon’s Hornsdale wind farm – will cut the steel-works costs by 40 per cent, and Gupta is planning on achieving similar reductions with his steel assets in Victoria and NSW.
“Renewable energy is at the heart of our Greensteel and GreenAluminium strategies, designed to make metal production and engineering competitive again in developed countries,” Gupta said.
“We see Australia with its incomparable energy resource – as the natural home for expansion of energy-intensive industry, with renewables to play an integral role.”
Gupta joins a growing list of big industrial consumers switching to renewables to lower costs and underpin future development.
As we reported on Tuesday, Sun Metals is soon to commission its 124MW solar farm that will power 30 per cent of its electricity needs at its north Queensland zinc refinery, and pave the way for a $300 million expansion.
Nectar Farms will use a Neoen wind farm and another Tesla battery to power its new greenhouse near Stawell in Victoria – a $550 million project that would have gone overseas were it not for the cheaper renewable energy option.
Corporates such as Telstra, Westpac, CUB, ANZ, CC Amatil, and any number of shopping centre owners and building developers are also turning to renewables, and solar and storage in particular, to slash their electricity costs.
The Numurkah deal will see GFG Alliance take most of the output of the 100MW (AC) solar farm for 15 years to help its Laverton steel mill, and will enable Neoen to triple the size of the facility, as it had hoped.
It had already planned a 38MW facility after it landed a contract to supply large scale renewable energy certificates (LGCs) to the Victoria government tram network and as part of its plans to to source 40 per cent renewables by 2025.
The signing ceremony may well have taken place at Kirribilli House, the formal residence of the Australian PM, but the federal government can claim no hand in the deal.
Franck Woitiez, the head of Neoen Australia, said the role of the Victoria government was critical for the Numurkah solar farm, and the broader contract with GFG Alliance that followed.
“Full credit to Victoria energy minister Lily D’Ambrosio and the government policy. Their role was crucial and it shows the benefits of providing some support and letting the market do the rest,” Woitiez told RenewEconomy.
He said Victoria would now reap the benefits of the original initiative and its state policy.
“State based schemes are crucial and the National Energy Guarantee needs to be more ambitious” to ensure more renewable energy and storage plants are built across the country, he said.
Note: According to Fairfax Media, the Victoria government is “furious” about its exclusion from the MOU signing ceremony, and the federal Coalition’s attempts to claim credit.
“Here is a government that is still talking about opening new coal-fired power stations, taking credit for a renewable energy project they haven’t put a cent into,” D’Ambrosio told Fairfax Media.
“Only Labor has backed and invested in this project, which will support our Renewable Energy Target – something the federal government is actively trying to destroy.”
Note: The Australian large scale solar market is experiencing unprecedented growth. But it won’t stop now. Large Scale Lookout – compiled by SunWiz and RenewEconomy – provides an insider view of Australia’s large-scale solar market.
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