Gupta’s GFG Alliance cancels plans for Cultana solar farm and Playford battery

Sanjeev Gupta’s struggling GFG Alliance has cancelled its plans to build the state’s biggest solar farm and a big battery to supply power to both his Whyalla steel works and the South Australia state government.

GFG revealed last month it was seeking buyers for the 280MW Cultana solar project and the 100MW/200MWh Playford big battery project, following its financing issues provoked by the collapse of its major backer Greensill.

EY has been mandated to pursue buyers for the projects, and a sales brochure seen by RenewEconomy says a data room was opened last week and final bids are due in early August. The projects can be bought   separately or as a bundle.

In the meantime, in a brief comment posted on its web-site on Tuesday, the Essential Services Commission of South Australia said the generator applications for both Cultana and the Playford battery had been withdrawn by GFG offshoot Simec Energy.

“On 28 May 2021, Simec Energy Australia notified the Commission in writing, that it has withdrawn the application for an electricity generation licence for Cultana Solar Project Company Pty Ltd to operate a 280 megawatt (MW) solar generating plant, located at Whyalla,” it said in its statement.

“Accordingly, the Commission has ceased its assessment of the application.”

A similar statement was issued for the Playford battery, which was to be located at Port Augusta, near the site of the now decommissioned coal fired generators in that city.

It could be that the licence applications will be renewed by whoever buys the rights to the two projects, although it does appear to mean that – at best – the two projects will be delayed, if not cancelled, by the sales process.

A buyer should not be too difficult to find given the the long term supply agreement that the Ross Garnaut-led Zen Energy signed last November with the South Australia state government.

The 10-year contract – which was put out for tender again after the failure of the Aurora solar thermal project to obtain finance for its ground-breaking solar tower project – was awarded to Zen, but it was backed by the big solar and battery projects to be delivered by its former shareholder, GFG Alliance.

The solar farm was to have been built by 2022 – and was to be the biggest in the state, overtaking the 220MW Bungala facility located not far away near Port Augusta.

The Playford big battery – described as a 135MW battery in the ESCOSA document, but as a 100MW/200MWh battery in the EY sales document – was to be completed by 2023 and was to be located close to where the brown coal generator of the same name was once located.

RenewEconomy has reached out to GFG Alliance, Zen Energy and the state government for more information.

Update: In a later statement, GFG said:

“The Transmission Connection Agreement, Development Application and all other licenses and permits to achieve financial close remain in place; the withdrawal of the Essential Services Commission of South Australia (ESCOSA) licences is a matter of process, initiated by us and we do not foresee an impact to the shovel readiness of both projects.

“It is common practice for utility-scale energy projects to submit a new application with ESCOSA during both the Development phase and post financial close, due to the normal technical and commercial changes that occur during the lifecycle of a project.

“We’ve been engaging closely with ESCOSA throughout the process and remain committed to a partnership or sale to bring these projects online as soon as possible.”