Emerging South Australian retailer Simec Zen Energy has signed power off-take agreements with two new solar farms being built in Queensland and Victoria by German-based Wirsol Energy, as it looks for more industrial customers in the eastern states.
The contracts by Simec Zen – the Australian energy arm of Sanjeev Gupta’s GFG Alliance – are for the 89MW Clermont Solar Farm, north of Emerald in Queensland, and the 110MW Wemen Solar Farm, near Mildura in Victoria.
Both solar farms are due for completion later this year. The eight-year contracts are for the majority of the output, with the rest likely to be sold into the “merchant” or wholesale market.
The contracts are “bundled”, meaning they account for both the wholesale price and the large-scale renewable energy certificate (LGC), although little value is attributed to LGCs in these sorts of projects.
There was no indication around the price, although people in the market talk of prices between $50/MWh and $60/MWh for large-scale solar farms, including LGCs, which is significantly cheaper than prevailing wholesale prices.
Simec Zen’s Geoff Titus said that while the company will build its own solar farms, where it makes sense it will contract with others.
Simec Zen has already committed to a 220MW solar farm near Port Augusta after signing a contract to provide cheap renewable power to five major industrial users in South Australia earlier this month.
It has also signed a contract with the Numurkah Solar Farm in Victoria to help power GFG Alliance’s Laverton steelworks in Victoria, and Gupta plans 1GW of solar plus various forms of storage for the Whyalla steel works he now owns and other customers.
Gupta also plans to build, or contract, up to 10GW of large-scale solar, which he says is the key for Australia to regain its position as a manufacturing nation based around cheap energy.
Gupta said on Thursday that the two new solar farm contracts are expected to boost its ability to offer cheap “baseload renewable” contracts with industrial customers in Victoria and Queensland.
“We are pleased with the Wirsol agreement that again reinforces our company’s commitment to the goals of economic and environmental sustainability,” Gupta said.
“We see Australia, with its abundance of energy sources, as the natural home for the expansion of energy-intensive industry, with renewables to play an integral role”.
Wirsol managing director Mark Hogan said the company was delighted to have signed two power purchase agreements.
“The signing of these PPAs mark another important milestone for Wirsol in Australia as we move towards our target of 1GW of solar energy by 2020,” he said in a statement.
“We share Simec Zen’s vision of delivering cheaper, more reliable and environmentally sustainable energy and we see strong alignment between our businesses.”
Wirsol has five solar projects spread across Victoria and Queensland, each due to be connected to the national power grid by the end of 2018.
These also include the 57.5MW Hamilton solar farm, pictured above, which is due to be completed soon, as well as the 57.5MW Whitsunday solar farm.
They are also adding a 25MW/50MWh Tesla big battery to the recently commissioned Gannawarra solar project in Victoria.
