Neoen may expand Vic solar farm to 126MW after tram tender win

French renewable energy developer Neoen is considering trebling the size of its Numurkah solar project near Shepparton after winning a Victoria government tender to supply renewable energy certificates for the state’s tram network.

Neoen shared the spoils of the tender win with Syncline Energy, and both are now likely to use those contracts as building blocks for much bigger solar installations, either using the “merchant market” by selling power to the grid, or seeking further contracts with corporate buyers or energy retailers.

Syncline Energy is already committed to building a 100MW solar farm, even though the contract with the Victoria government equates to only the LGCs (renewable energy certificates) generated from around 35MW.

The contracts have an initial supply period of five years, with an option to extend for another five years.

Neoen’s contract is for 38MW, but its Numurkah solar project can be expanded to 126MW, and it will consider that option over the next few months – again looking at the outlook for the corporate PPA market and the merchant market – before reaching financial close in February.

Syncline, which is building its first large-scale solar farm after a decade in “behind the meter” installations, expects to reach financial close in the next month or so and begin construction in October.

The solar farm, to be located on excess land on an almond farm that had already been an energy customer, will feature single-axis tracking technology. “We will contact some of that excess capacity but we will likely have a lot of merchant exposure,” CEO Phil Galloway says.

Neoen on the other hand, is poised to break through 1 gigawatt of projects, a remarkable achievement given that it only began construction of its first Australian project two years ago, and had aimed to reach that target by 2020.

It has shown a remarkable ability to win government and private tender contracts, with its biggest so far being the 309MW Hornsdale wind project in South Australia (won via a series of ACT government tender), which will now be accompanied by the 100MW Tesla big battery (after a S.A. government tender).

It has also won 131MW of solar projects in western NSW via ARENA’s big solar tender, the 10.6MW Degrussa solar project (with 6MW battery storage), again through ARENA, and the 1MW Coleambally project via EnergyAustralia.

It is also looking to finalise a 50MW solar farm near Gilgandra, which will go merchant, is negotiating with the Victoria government over the 220MW Bulgana wind project to be built in connection with a 20MW/34MWh battery storage facility to supply 100 per cent renewables for Nectar Farms.

With Numurkah, it will potentially have more 1,100MW of renewable energy and storage projects either completed or under construction, or about to start, by the end of the year.

Neoen’s Australia boss Franck Woitiez said the company’s ability to win such contracts is helped by the fact that it has deep-pocketed backers, including French entrepreneur Jacques Veyrat and BPI, a French government investment bank, meaning it did not have to go to market to raise equity for projects.

Woitiez also said the company was helped by its “long term perspective”, rather than short term returns, and its strong relationships with governments, off-takers and developers.

Woitiez says the decision on expanding Numurkah beyond the tram contract will depend on the outlook for corporate PPA and the wholesale market, but it was looking promising. “We’d like to make it as big as we can,” he told RenewEconomy on Thursday.

“Given retail prices for electricity, I am sure there will be deals made by corporate buyers. Signing contracts for renewable energy will deliver cheaper prices and more certainty than what they get now.”

Woitiez also said the company was helped by its “long term perspective”, rather than short term returns, and its strong relationships with governments, off-takers and developers.

The corporate market is already starting to take shape in Australia, with Sun Metals building a 116MW solar farm in north Queensland, tester contracting a 70MW solar farm, Nectar Farms looking to wind and storage, and numerous smaller businesses looking to renewables, including WA’s biggest piggery.

Some even bigger corporate buyers are also in the market, with Apple looking for local contracts to meet its company’s global objective of 100 per cent renewable energy by 2020, and brewing group Foster’s doing the same as part of its parent company’s goal of reaching that target by 2025.