NAIF backs 10MW solar and battery plant in Northern Territory

A 10MW solar and battery power station being built south of Darwin in the Northern Territory has won backing from the federal government’s Northern Australia Infrastructure Facility (NAIF), via a $37 million loan.

The NAIF loan, announced on Wednesday, will also help underwrite a neighbouring 12MW gas-fired power plant in Darwin, which is being developed alongside the solar plant by Melbourne-based investment group, Merricks Capital.

Merricks Capital chief executive Adrian Redlich said the solar and battery project near Batchelor, 100 kilometres south of Darwin, had been three years in the making, with construction beginning in around June.

Both the solar farm and the gas plant will be the Territory’s first-ever privately-owned power generators and will sell their electricity to a private retailer. The projects also mark the first energy generation investment for Merricks Capital.

According to the Northern Territory News, Redlich said the gas and solar project would be considered “stage 1” of the company’s two-part strategy, which could include further plans “to shake up the Territory’s electricity market.”

The gas power plant is expected to be online by May 2021, while the solar farm will be feeding electricity into the grid by December this year. It is different to a 12MW solar farm, also at Batchelor, that was developed by Tetris and sold to Italian oil and gas giant ENI.

Under the NAIF funding agreement, Merricks Capital is also required to work with the Larrakia Nation Aboriginal Corporation to deliver a range of initiatives including cross-culture awareness training to employees and contractors.

“These new energy projects will help modernise Darwin’s energy networks and reduce reliance on older and less-efficient gas and diesel generators,” said federal resources minister, Keith Pitt, in a statement on Wednesday.

“They will link with existing transmission infrastructure between Darwin and  Katherine, and will supply up to 90 per cent of future electricity generation needs for the Territory’s largest energy retailer Rimfire.”

CLP Senator for the Northern Territory Dr Sam McMahon said it was good to see the NAIF supporting local jobs in the energy sector.

“Power generation and transmission infrastructure have been badly neglected leading to widespread blackouts and a lack of reliability,” he said.

“This investment will see a much needed reserve capacity added for Top End consumers and stability for the network.”

Australia’s minister for energy and emissions reduction, Angus Taylor said the Morrison government was focused on supporting new energy generation projects that created new jobs and delivered affordable, reliable power.

“These projects will help to lower power prices for Territorians, helping to back local businesses and strengthen the economy,” he said.

The federal government’s NAIF started its life looking worryingly like a slush fund for fossil fuels but has so far underwritten a mixed bag of infrastructure projects, including the Genex Power pumped hydro project in northern Queensland.

For the NT, the Merricks Capital project claims the seventh NAIF loan, including a $150 million loan to support of a $300 million expansion of the Territory’s airport facilities, which was to include three solar farms and a large-scale battery storage system.

The Hudson Creek gas power station and the Batchelor Solar and Battery Farm are expected to create around 160 new jobs during the construction phase, which as noted above, is already underway.