New Zealand dairy giant signs two major solar deals as it works to wean itself off coal boilers

New Zealand dairy giant Fonterra has this week signed long-term renewable energy power purchase agreements with two new solar projects as part of its efforts to wean itself off the use of coal power for boilers.

The Fonterra Cooperative is the world’s largest exporter of dairy products, and has been steadily replacing its traditional coal boilers with a variety of cleaner energy sources. It has already successfully stepped away from coal at all its sites on the North Island and is doing the same on the South Island.

This week it signed two virtual PPAs that will underpin the economics for two new solar projects, the 42 megawatt (MW) Somerton solar farm and the 129 MW Darfield solar and battery project, both in Canterbury on the South Island.

Fonterra’s current goal is to phase out coal as an energy source by 2037.

“Solar is a good fit for our operations, with generation aligning well to the peak of the milk season. This agreement helps bring new generation to market while at the same time giving us long term price certainty,” said Anna Palairet, Fonterra CEO.

“We’re committed to creating a more sustainable future and have a role to play in supporting new renewable energy supply in New Zealand.

The Somerton solar farm, being developed by Anza Power, is expected to generate approximately 65,000 megawatt-hours (MWh) of renewable electricity each year and is located close to Fonterra’s Darfield and Clandeboye manufacturing sites. Anza expects the project to be operational by the first quarter of 2028.

The Darfield deal, with NZ Clean Energy (NZCE), a Foresight portfolio company, is one of New Zealand’s first large-scale solar PPAs between a major industrial energy user and an independent renewable energy developer.

Fonterra has also already replaced one of its coal boilers at its Edendale manufacturing site in the South Island with an electrode boiler, which is expected to cut emissions by around 20 per cent annually.

Generating 30 MW of thermal energy using electricity, Fonterra is planning to install an additional two electrode boilers at Edendale by 2027.

The company is also in the process of converting two boilers at its Clandeboye site to run on wood pellets.

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