Sun Metals goes for bigger solar plant to hedge against energy costs

Korean owned zinc refiner Sun Metals has decided to expand the size of its proposed solar farm in north Queensland to 116MW as it seeks to keep a lid on energy costs and plans to expand its refinery operations.

Sun Metals on Thursday said the Sun Metals solar farm, to be built by First Solar 15km south of Townsville, would now total 116MW AC (or 140MW DC), rather than the 100MW initially contemplated.

Once constructed, it will be Australia’s largest solar project, although that title is likely to be retained for only a short time considering the other solar projects to be built in the area, including the 142MW Ross River solar farm by Esco and Palisade Investments.

The decision by major energy users such as Sun Metals to turn to solar follows extraordinary price surges on wholesale electricity markets in Queensland – about double the cost of solar in 2017 – and puts into question a push by conservatives to build a coal-fired generator in the region.

“Large-scale solar is fast becoming one of the most cost-effective sources of energy generation in Australia,” said Jack Curtis, First Solar’s regional manager for Asia Pacific.

“This project represents the viability of the commercial and industrial solar market in Australia and the growing trend of major energy consumers owning and operating renewable energy assets.”

Indeed, it is the first large-scale solar farm to be built directly by a major energy user in Australia, following a growing trend in the US and elsewhere. Major energy users such as Google, Apple and Amazon are seeking to source 100 per cent of their electricity need through renewable energy.

He says that with more than one dozen other large-scale solar projects to be built in Australia this year, it is clearly a “tipping point” for large-scale solar. And it would likely mean that the 33,000GWh renewable energy target would be met by 2020.

“Sun Metals is pleased to sponsor this landmark project for Australia and we recognise the importance of quality and performance in every choice we have made for the delivery of the project,” said Yun Choi Sun Metals’ CEO and Vice President Korea Zinc.

Sun Metals have previously said that the solar investment would underpin plans to expand its refinery, a position that undermines attacks on renewable energy as a “manufacturing killer”.

Sun Metals has also been a proponent of rule changes to the electricity market, particularly those that could encourage battery storage and reduce the pricing power of fossil fuel generators. In Queensland, the market is dominated by two government-owned companies, and prices have soared this year.

RCR Tomlinson Limited will manage the engineering, procurement and construction (EPC) of the project. Construction is scheduled to commence in April 2017.