Juwi and Neoen in court battle over Degrussa solar and storage project

Two leading French and German renewable energy giants have become embroiled in a battle over payments at the landmark solar and battery storage facility at the Degrussa copper mine in Western Australia.

Juwi, responsible for the construction of the $39 million project, has taken French-based Neoen – the owner of the project (as well as the Tesla big battery at Hornsdale) – to court over a dispute some of $2 million, the West Australian newspaper reports, citing documents lodged with the Supreme Court.

The Degrussa solar and storage project – combining 10.6MW of single axis tracking solar and a 6MW/1.4MWh battery – is designed to cut the use of diesel by around five million litres a year, and act as a showcase for renewables and storage could reduce the immense cost, and pollution, from using diesel generators for remote operations such as mines.

For this reason, the project was half-funded by the Australian Renewable Enegy Agency, which paid for $20 million of the cost. “The project aims to increase knowledge and confidence in the use of renewable energy to power off-grid mine sites,” it says on its website.

Mine owner Sandfire Resources, said in its most recent half yearly report that the solar farm had provided on average 20.0 per cent of the overall power usage for the December half.

However, a major blackout in 2016 – believed to be from problems at the mine’s 19MW diesel generator – and the impact on the Degrussa installation and decisions taken at the time appear to have sparked a major dispute between Juwi and Neoen.

RenewEconomy reported last September that Neoen had made a claim against Juwi over problems at the Degrussa solar and storage plant. In its prospectus ahead of its stock exchange listing, Neoen said the “blackout” in October 2016 meant that the plant was offline for most of the first half of 2017.

Neoen said then that it received a claim for $A600,000 from Juwi for the cost of extra work not covered by the EPC contract, but Neoen has made a counter claim of $A2.9 million for the loss of revenue from the project. It says the dispute is still not resolved. And now it has gone to court.

According to the West Australian, Juwi filed a Supreme Court writ in Perth against Neoen seeking $650,000 in contract variations, and the return of a $1.47 million performance bond kept by Neoen as part of a $3.2 million claim for liquidated damages.

Juwi is seeking the $650,000 payment for work performed during six months from October 2016 when, according to the writ, Neoen refused to restart the solar farm after the site-wide blackout, the West reported.

It also said that Juwi is also disputing the certification in December 2017 of performance liquidated damages of $3.2 million that led to Neoen withholding the performance bond.

Origin Energy has a contract with the solar facility to buy large scale renewable certificates to help it meet its renewable energy target oblligations. The contract is for five years, which was the expected minimum mine life of Degrussa, which is due to close in 2022.