One of Australia’s first solar and battery hybrid projects reaches financial close, confirming big shift in market

One of Australia’s first solar and battery hybrid projects has reached financial close, confirming the big shift in Australia’s energy market away from wind energy to more bankable projects where the cost of technologies are falling rather than rising.

The Denmark-based European Energy – one of the most active players Australia’s large scale renewable industry, says it has landed finance from two international banks for its Winton North project, south of Wangaratta in Victoria, which combines 130 megawatts (MW dc) of solar and a 100 MW, 220 MWh big battery.

The project is actually already under construction and is due to be complete this year, and has been underpinned by a power purchase agreement with Amazon, which first signed up for the solar output but has now added battery to its deal.

“Winton North is another example of the high-quality assets we are developing in Australia, strengthening our platform for future investment, partnerships and sustainable long-term growth,” Catriona McLeod, the country manager Australia at European Energy, said in a statement.

The financing has been provided by Commerzbank AG, Singapore Branch and Societe Generale, and McLeod says it reflects continued support from international lenders for hybrid renewable energy and battery storage assets.

“We continue to build a diversified portfolio of renewable energy projects here in Australia that combines strong resource fundamentals with increasing demand for flexible generation and long-term power offtake,” she said.

It continues a busy few months for European Energy, which also operates the Mokoan solar farm in Victoria and is developing a number of other projects, with the biggest being the 1.1 GW Upper Calliope solar and battery project in Queensland, which has a PPA with Rio Tinto to help supply its giant Gladstone aluminium smelters and refineries.

It has also won underwriting agreements with the federal government for its Bullyard and Kayuga solar and battery projects in the latest tender under the flagship Capacity Investment Scheme (CIS).

Solar and battery hybrid projects are relatively new to Australia, with the first in the country’s main grid still working through its commissioning process, but have become the flavour of the day because of their competitive costs and their relative ease of construction and negotiating the planning processes.

Wind energy projects, on the other hand, are struggling to gain finance, despite many of them being supported by underwriting agreements under the CIS. That issue is largely sheeted down to rising costs, planning problems and grid connection difficulties.

Internet giants such as Amazon have been hungry for power supplies in Australia and around the world to meet their surging data centre needs, and are now among the main buyers of renewable power in the country, with a number of new deals being announced in recent weeks, including one for a major new battery in South Australia.

Amazon’s head of infrastructure policy in Australia and New Zealand, Matt O’Rourke says co-locating battery storage with solar generation means clean energy can be stored and dispatched when the grid needs it most, helping strengthen reliability as Australia transitions to renewables.

“This is another step in Amazon’s commitment to reaching net-zero carbon by 2040,” he said in a statement.

Jens Peter Zink, the deputy CEO of European Energy, said the ability to secure financing from leading international banks demonstrates the quality and bankability of the company’s assets.

“It enables us to optimise our capital structure, recycle capital into new development opportunities and continue expanding our portfolio across key markets. Maintaining access to competitive project financing is fundamental to scaling our business and creating long-term value.”

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