Landmark deal to power Coles underpins three NSW solar farms

Construction of three large-scale solar farms proposed for regional New South Wales could be underway as early as next month, after a landmark deal between Australian supermarket giant Coles and UK-based renewables developer Metka EGN.

The 10-year deal – claimed as a first for a major Australian retailer – will see Coles purchase more than 70 per cent of the more than 220 gigawatt hours of electricity that will be generated by the three PV plants, which will be built and operated by Metka near Wagga Wagga, Corowa and Junee.

This would be enough to meet around 10 per cent of the retailer’s electricity needs, a statement said, and would add to the commercial solar already installed on 30 Coles outlets, and to plans to install rooftop PV on a further 38 stores this financial year.

The three solar farms at the centre of the deal, totalling 260MW in capacity, were originally developed by Terrain Solar – the company behind the under construction Warwick Solar Farm, now owned by and set to supply the University of Queensland – and were acquired by Metka earlier this year.

Terrain chairman David Griffin said the deal struck between Metka and Coles meant that construction of the solar farms would go ahead in September, and all three projects could be finished and supplying power to the grid by July 2020.

“Terrain Solar is incredibly proud of this landmark agreement that will underpin the construction of three new renewable energy plants in regional New South Wales,” Griffin said in a statement.

Coles Group CEO Steven Cain said the increased use of renewable energy was a major part of the company’s commitment to be the most sustainable supermarket in Australia.

“We are thrilled that with this agreement, Coles can make a significant contribution to the growth of renewable energy supply in Australia, as well as to the communities we serve.

“We have already made changes throughout our business to use energy more efficiently, which has enabled us to reduce our greenhouse gas emissions by 4 per cent over the past financial year and more than 30 per cent since 2009, despite growing our store network.

“Over the past two financial years alone we have invested more than $40 million in energy efficiency measures including upgrading all store lighting to LED by the end of 2019 and the installation of solar panels on 30 stores,” Cain said.

“We plan to install solar panels on another 38 stores this financial year and we will be working with our landlords and property developers to identify further locations suitable for on-site solar power generation,” Coles chief property and export officer Thinus Keeve added.

For the London-based Metka, which as of June is 100 per cent owned by Greek industrial company Mytilineos, the three NSW solar projects marks its first foray into the Australian market.

In a statement in June, the company said it was pleased to announced the acquisition of a first 260MW solar PV portfolio in Australia, following its opening of a Melbourne office in 2018.

“Australia is a key market for METKA EGN’s global renewables development strategy extending across the Asia-Pacific, Europe, and Latin America regions,” it said.

“This portfolio represents a strong platform for building out a pipeline of assets in Australia and the wider APAC region.”

The three NSW solar farms, meanwhile, are the latest in Australia to be built off the back of corporate power purchase agreements, as big businesses and energy users turn to large-scale renewables to cut costs and bolster their sustainability.

Likewise, the huge pipeline of proposed large-scale wind and solar farms in the Australian development pipeline are looking to the corporate market to underwrite their ambitions. https://reneweconomy.wpengine.com/desperately-seeking-ppas-7gw-of-solar-wind-queue-up-for-corporate-deals-28068/

Notable corporate PPAs of the recent past have included Australian steel giant BlueScope agreeing to buy the bulk of the output from the Finley Solar Farm, which has just started sending power to the grid in NSW. https://reneweconomy.wpengine.com/steel-giant-bluescope-turns-to-solar-with-major-ppa-deal-37396/https://reneweconomy.wpengine.com/finley-solar-farm-starts-sending-power-to-nsw-grid-93897/

And in March last year, brewing giant CUB signed a 12 year power purchase agreement with BayWa to buy just under half of the output of the 112MW Karadoc solar farm in Victoria, completed late last year by German company BayWa – accounting for nearly 90 per cent of CUB’s total electricity needs.

And while Coles might have clinched the first such deal for a major retailer in Australia, fellow supermarket giant Woolworths Group claimed its own first earlier this year, through the highly successful issuing of a green bond in April.

The green bond – the first to be issued by a major retailer – raised $400 million from more than 90 investors to fund the installation of commercial solar across Woolworths rooftops and energy-efficient lighting and fridges inside its stores.

In a statement at the time, Woolworths Group CFO David Marr said the company had a responsibility to lead in the sustainable business space.

“We know the investment community is also looking to support companies committed to sustainability driven projects that minimise environmental impact,” Marr said.

“The issuing of Green Bonds is another step in meeting our environmental commitment, while allowing our investors to support projects that are important to them.”