India-based renewables contracting giant Sterling and Wilson Solar has made its second big play in the Australian market, after winning the contracts for construction through to operation and maintenance of what is believed to be Neoen’s massive Western Downs project.
Sterling and Wilson Solar Limited (SWSL) revealed on Monday (PDF) that it had signed an EPC contract worth around $A525 million, as well a 20-year, roughly $A85 million Operation and Maintenance (O&M) contract for a solar project in Australia.
The media release did not name the project behind the contracts, but industry sources suggest a contract of that scale could be none other than Neoen Australia’s nation-leading 400MW solar project in Queensland’s Western Downs, which is set for construction in July after inking an off-take deal with the state’s renewable gen-tailer, CleanCo.
That deal – announced by Queensland Premier Annastacia Palaszczuk at the May 06 Stimulus Summit co-hosted by the Smart Energy Council and RenewEconomy – will see CleanCo buy 320MW of the output of the Western Downs Green Power Hub, which may also include a 150MW battery down the track.
For the Mumbai-based SWSL, the contracts announced this week mark its biggest yet job in Australia, and take the company’s Australian order book to around $A1 billion. Reward no doubt, for what it described in a recent results briefing as “initial hiccups” in its opening market forays.
Its first job in the country kicked off at the end of last year, with the construction of the 200MW Wellington solar farm in New South Wales, on behalf of Lightsource BP.
With the new contract, SWSL said this week it had “clearly established its presence in Australia,” and positioned itself among the largest solar EPCs in what was a “very promising” market.
“This is our largest order in Australia and is a culmination of efforts to break new ground in countries like Australia, the United States and South America, where SWSL has invested in a strong team that is completely aligned with the local requirements,” said SWSL CEO Bikesh Ogra.
The company said it expected a substantial portion of its international revenues for the current financial year to come from Australia, South America and the US, where solar project construction had “commenced to full capacity.”
SWSL also said in the statement that it believed the worst of the Covid-19 impacts on the industry “seemed to have passed.”
As RenewEconomy has reported, even before factoring in Covid-19, the Australian renewable energy market has proven rather tough going for solar EPC contractors.
In 2018, RCR Tomlinson went in to administration after crumbling under the weight of cost over-runs and delays at around one dozen large-scale solar farms, many of them in Queensland.
And in February of this year, listed contracting giant Downer Group announced a dramatic exit from the solar contracting business, saying it had become too hard because of changes and the complexity of grid connections, and it was no longer worth the risk.
Likewise, it has since emerged that the listed Decmil, which last year revealed problems at the Sunraysia solar farm in NSW, was no longer accepting “full EPC wrap” contracts, due to the complexity of changed connection rules.
SWSL seems confident, however, that it has what it takes to make it Down Under. “We are confident, as a global solar EPC company with experience across geographies, we can bring our best practices to this market,” Ogra said in December.
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