Network company Spark Infrastructure says it is looking at the possible expansion of its newly completed Bomen solar farm in New South Wales, and is also looking at adding a big battery to the project.
In a presentation at the company’s annual general meeting on Wednesday, CEO Rick Francis said the company was also looking at opportunities for new wind and solar developments in NSW, Victoria and Queensland, particularly as some international developers look to exit the market because of the impact of the Covid-19 pandemic and new foreign investment rules.
The 100MW Bomen solar farm is Spark’s first foray into the ownership of large scale renewables, and signals its biggest push away from the regulated environment of network ownership. (Spark owns $18 billion of distributed networks in South Australia and Victoria and a 15 per cent share in transmission group Transgrid).
Unlike many other new solar and wind projects, the Bomen solar farm has been completed on time and on budget (by its contracting unit Beon Energy Solutions). Bomen is currently producing at a commissioning “hold point”, and Francis says the company is expecting to reach full commercial operation by the end of June.
Francis says the company is assessing the business case for adding up to 20MW/40MWh of battery storage to the Bomen Solar Farm, and expanding the size of the solar plant.
“(We are also) actively exploring new opportunities in the renewables sector as part of our “Value Build” strategy,” Francis says in notes to his presentation. “Greenfield development projects (wind and solar) in NSW, QLD and Victoria are of particular interest.”
The push into large scale renewable projects is part of a diversification plan for Spark, which says it is still nevertheless well placed for what it sees as the unstoppable transition to a renewables-dominated grid over the next decade or two.
It cites the Integrated System Plan put together by the Australian Energy Market Operator, and the need for two major new transmission links – the $1.5 billion Project EnergyConnect linking South Australia to NSW, and the $1.4 billion HumeLink to connect Snowy 2.0 to the NSW grid.
Another potential link to west Victoria is also on the cards, plus there is the potential upgrade of the link from NSW to Queensland, and more than $2 billion that could be spent on new renewable energy zones in NSW.
Francis noted that more 30GW of new large scale renewable energy would likely be built to replace existing coal generators by 2040, with up to 21GW of new dispatchable resources including pumped hydro, battery storage, demand response and “virtual power plants”. There was no mention of gas. And rooftop solar is expected to more than double to around 25GW.
“We will continue to look at further opportunities as we develop a business platform focused on renewable energy and new technologies,” he said.
However, Francis had another dig at Australian regulators and the country’s regulatory framework, which he said must adapt to the changing way the networks are being used such as the shift from one-way transportation of electricity from centrally located generation plants to two-way flows of electricity between consumers.
“As we see the grid being used as a platform to support the efficient exchange of energy the regulatory framework must evolve to better reflect the outcomes valued by consumers,” he said.
“Over the last few years, there have been significant changes and interventions in the regulatory regime which have delivered short term manufactured reductions in prices to consumers, but have added long-term uncertainty and risk to the regulatory framework. As long-term investors in energy infrastructure, we are committed to ensuring consumers receive services at the lowest sustainable and efficient cost.
“Most recently we have pressed the Regulator regarding their persistent overestimation of inflation which actually prevents regulated businesses from recovering the allowed revenues determined by the Regulator.
“In the current environment, an artificially low rate of return for a regulated business will have the effect of constraining its ability to return to normal operating circumstances as quickly as possible following the Covid-19 pandemic.
“It also puts pressure on their ability to sustain its existing workforce and to invest in the network to support the current and future needs of customers and the electricity system over the next five years of its regulatory determination.”
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