Gupta signs up solar farm to power Victoria steelworks

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Sanjeev Gupta signs contract with Neoen to use new solar farm to power Laverton steel mill in Victoria and slash costs. Turnbull and Macron were on hand to witness signing, and the promise of a cheaper energy future via renewables.

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Neoen Gupta GFG Alliance
Neon’s Xavier Barbaro and GFG Alliance’s Sanjeev Gupta

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.

To enquire about ordering your copy of Large Scale Lookout, email [email protected]

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29 Comments
  1. Jon 5 months ago

    Makes a mockery of the Federal Goverment’s emmision targets, greening if the grid is going to happen in spite of them, not because of them.

    It’ll be intetesting to hear how Malcolm Turnbull tries to spin this one…. the annoying thing is I think he deep down believes that we need to transition to renewables but doesn’t have the equipment to stand up to his party.

    • Joe 5 months ago

      Two Tonguer Turnbull the straw man of Aussie politik. We all it know it and yet he prances around like his some sort of King….can’t win a Newspoll and can’t stand up against the hard right nutters in his party room.

      • mick 5 months ago

        had to turn off the idiot box he was taking credit for rooftop solar and yapping off about the snowy 2 brain fart

        • Joe 5 months ago

          The only rooftop solar that he can sort of take credit for is at his home. But even that idea / installation was because of his son!

          • mick 5 months ago

            this is right after macron fronts him for being gutless( in diplo-speak of course)

          • Joe 5 months ago

            Yeah, good to see ‘Manny’ giving Two Tonguer a lesson

      • stucrmnx120fshwf 5 months ago

        That’s 30 bad news polls for Abbott, 30 for Turnbull, 60 bad news polls, tripling the deficit, without the GFC, fighting a Clean disruption industrial revolution, readying tax cuts to the banks, because of their huge profits, from cutting people’s money in retirement, to cut their healthcare.

        • Lindsay 5 months ago

          Must be a Bill (champion self promoter) Shorten tragic.

          • stucrmnx120fshwf 5 months ago

            Are you saying that the Abbott Hockey zombie cuts, cruelty based budget, didn’t accumulate debt, at 4 times Labor in the GFC, without even the GFC. 500 billion dollars, is half of the national GDP, do you or the country, have that sort of disposable income.

    • Brunel 5 months ago

      And some say that politicians should not be funded by the AEC. 🙄 Therefore the politicians are funded by private firms instead!

  2. Glynn Palmer 5 months ago

    A message to the COALition anti renewables group. I won’t mention the name of a distinguished military leader and engineer who started Victoria’s electricity generation industry from whom they adopted their title.

    Industry is not listening to you. Industry recognises that renewables will provide the energy of the future at a lower cost than fossil fuels. Please cease to be a fossil fool.

    • stucrmnx120fshwf 5 months ago

      2023, renewables half of the price of carbon emissions based power, 2028, a quarter of the price per kWh, whose going to be dumb enough to burn brown coal, as dirty as the stuff you flush every day. I look forward to the Pilbara solar farm, to Indonesia cable.

  3. George Darroch 5 months ago

    This is also the project powering Melbourne’s trams.

    Turnbull should get his grubby hands off this project, but he loves things that are shiny and technological so he can bask in the reflected glory, and doubly so when they involve foreign leaders and captains of industry.

    • Joe 5 months ago

      The COALition give Labor states a public spraying at every opportunity for going strong with their respective RE Targets and getting on with the business. But it doesn’t stop COALition MP’s from showing up at media staged events for a ‘first sodding’ of a new RE project. And now we have Two Tongues Turnbull taking the credit off Lily / Vic Labor. These ‘COALition Climate Criminals’ have no shame.

      • Marg1 5 months ago

        Agreed, well said. He’s such a shyster isn’t he?

        • Joe 5 months ago

          Thanks

  4. MaxG 5 months ago

    Sometimes I am ashamed to be Australian: https://www.facebook.com/junkeedotcom/videos/891380047641127/

    • Joe 5 months ago

      Max, there is no shame in being an Aussie. The shame is on the Not My Government and what is does / doesn’t do in our name. Those ‘climate criminals’, they are the ones that should be ashamed.

  5. Thucydides 5 months ago

    Poor Malcolm Turnbull, political hostage of the coal lobby, reduced to photo-bombing renewable energy projects his government has done its best to sabotage.

    • Marg1 5 months ago

      Spot on Thucydides, what a sham he is.

    • Ren Stimpy 5 months ago

      So true. The sheer duplicitousness of the snub to Victoria which has real renewables ambition, while the man himself is really a retreating earthworm on renewables, then he takes all credit for Victoria’s good work.
      Fridge, it would drive a less sober man to motherflipping curse words!

  6. RobertO 5 months ago

    Hi Giles a small correction please

    “Nectar Farms will use a Neoen wind farm and another Tesla battery to power its new greenhouse near Stawell in Victoria – a $00 million project that would have gone overseas were it not for the cheaper renewable energy option”

    How much money $00 million project.

  7. john 5 months ago

    The simple outcome from this is that this is the cheapest cost of energy.
    This is disruption to the present situation.
    It has zero to do with some kind of feel good attitude it is cheaper.
    When new Technology is cheaper it takes over the market.
    We will be witness to this kind of disruption to the old type of energy production moving forward.

  8. john 5 months ago

    This is exactly as expected technological disruption it is happening.
    Why?
    It is cheaper it has NOTHING to do with feel good it is cheaper.

    • Timmeh 5 months ago

      Thats great, yes, renewables are now getting cheaper, so yes let’s use them. The problem most people have is the fact that the old entrenched industries are successfully lobbying government to stop us moving forward with cheaper AND cleaner energy. I don’t understand your point. Would you rather a chimney stack spewing coal pollutants or a wind farms and solar panels?

  9. Phil 5 months ago

    Like many consumers (myself included) who said about energy costs …enough is enough and went off grid/microgrid …Industry is doing same

    And it not Kilowatts it’s Gigawatts

  10. Ben 5 months ago

    Hi, I presume that when a large electricity consumer signs a private electricity supply agreement for a portion of their electricity supply (regardless of technology), the obvious intent is to reduce their electricity bill with the traditional grid retailer. But since a portion of the bill includes some poles& wires opex recovery, does a separate electricity supply agreement mean that the customer is paying proportionally less for poles & wires than his neighbour?
    I don’t know how a demand side connection agreement with separate generators reconciles the poles & wires cost.

    • Giles 5 months ago

      Most wholesale electricity contacts to big consumers do not include big network charges – that is cross subsidised by the mugs in the households and small businesses.

      • Nick Kemp 5 months ago

        No wonder more and more people are unplugging from the grid – soon they’ll want to charge a supply charge so that they can take electricity from you for a piffling reward.

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