Neoen inks PPA to sell half the output of its biggest solar farm in NSW

Energy retailer SmartestEnergy Australia continues to hoover up power purchase agreements, the latest being a deal to take half of the output from Neoen Australia’s 440 megawatt (MWp) Culcairn solar farm.

The Culcairn project in New South Wales’ (NSW) Riverina district is still under construction with owner Neoen starting the build in late 2023 – almost five years after starting the planning process and two years after landing planning approval. 

The power purchase agreement (PPA) with SmartestEnergy Australia is to take 50 per cent of the solar farm’s output for four years and starts in 2026. 

SmartestEnergy specialises in business customers and is wholly owned by Japanese industrial giant Marubeni. It has been securing power purchase agreements (PPAs) with renewables projects across the eastern seaboard for the last few years.  

A PPA with Enel Green Power Australia agreed to take a portion of the output from the $140 million, 93MW Girgarre solar project in Victoria late in 2023. More followed with Greek-owned Mytilineos for the 40 MW Kingaroy solar farm in Queensland and with Octopus Energy for about a quarter of the output of the 333MW (dc) Darlington Point solar farm in NSW.

Earlier this year, SmartestEnergy signed a “significant long-term” PPA with the 400 MW stage of the New England solar farm.

“This agreement with Neoen underscores our purpose in the market to support the renewable transition,” said SmartestEnergy Australia CEO Robert Owens in a statement. 

“We continue to provide renewable energy solutions for our customers, and we can play our part in ensuring that the transition in Australia keeps pace.”

The Culcairn project is Neoen’s second largest solar farm globally, after the 460pMW solar farm at Western Downs Green Power Hub, already in operation in Queensland. It has an option to build a two hour, 100 MW battery on the Culcairn site. 

Neoen Australia CEO Jean-Christophe Cheylus says the PPA for Culcairn marks its first with SmartestEnergy. 

“Construction of Culcairn Solar Farm is progressing well, and we are looking forward to the major contribution the project will play in powering businesses as well as supporting NSW’s rapid energy transition.”

The French renewables company has also signed a Long-Term Energy Services Agreement (LTESA) through the Australian Energy Market Operator (AEMO) Services’ tenders, under the NSW government’s Electricity Infrastructure Roadmap. 

It says this type of agreement guarantees energy producers an option to sell their electricity at an agreed minimum fixed price for 20 years, making it easier for project developers to secure finance and on the best terms.

The Culcairn project was part of NSW’s second tender for new wind and solar capacity, a tender that saw strike prices shift upwards to sub-$55/MWh. 

Market insights released in March from the succeeding tender indicate how much rising costs in the supply chain are beginning to impact on prices. 

The insights point to an increased average “strike price” of $65/MWh – much higher than the sub-$35/MWh for solar and sub-$50/MWh for wind in the very first tender.