Sun Metals says new solar farm will underpin zinc refinery expansion

Korean owned zinc refiner Sun Metals says the 116MW solar farm that it began building this week will likely underpin expansion of its north Queensland refinery business – already one of the biggest energy consumers in the state – and create as many as 100 permanent new jobs.

Sun Metals CEO Yun Choi said on Wednesday that the 116MW solar farm, which is being built by First Solar 15km south of Townsville, will provide around one third of the refinery’s electricity needs, and would not only ensure the viability of the existing plant, but had underpinned the company’s plans for expansion.

“The SMC Solar Farm investment of $199 million is the first step in Korea Zinc ensuring the long term viability of the existing refinery and also underpinning the potential for its expansion using world class new technology, with an investment decision due in late 2017,” he said in comments made on Wednesday at an official ceremony.

Founded in Queensland in 1996, the refinery currently has a staff of 291 and produces 225,000 tons of zinc a year, using more than 900,000 megawatt-hours of electricity, Choi said.

“An expanded refinery would see an additional $267 million invested and is expected to support up to 827 construction jobs during peak construction and an additional 100 permanent refinery workers once operational, all within North Queensland,” Choi added.

“The …expansion will also see an increase in broader economic activity for Townsville, with significant increase in Townsville Port activities, uplift for local suppliers and contractors and also, via use of new refining technology, reduced water usage and environmental outputs.”

As we reported here, Sun Metals’ move to solar follows extraordinary price surges on Australia’s wholesale electricity markets, and particularly in Queensland, where they are about double the cost of solar in 2017.

It has also been the driving force behind proposed changes to energy market rules, pushing for a 5-minute settlement rather than the current 30 minute settlement, to encourage battery storage, loosen the pricing power of the big fossil fuel generators, and lower prices.

“This is a large refining company that views solar as better alternative to their current power solution,” said Jack Curtis, First Solar’s regional manager for Asia Pacific in comments made in February.

“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, while the Sun Metals project is the first large-scale solar farm to be built directly by a major energy user in Australia, it will not be the last.

In the US and elsewhere, big corporates like Google, Apple and Amazon have committed to sourcing 100 per cent of their electricity needs from renewables. A recent report found that five of America’s largest tech companies have signed power purchase agreements for nearly 3,100MW from renewable resources.

Sun Metals’ solar project is expected to be completed in early 2018 and fully commissioned and providing renewable energy into the refinery’s energy mix by April 2018.

Queensland energy minister Mark Bailey said the project was also expected to create 210 solar powered jobs during construction.

“Through government-owned Powerlink, the Palaszczuk government will facilitate connection of Sun Metal’s new power station to the grid,” Bailey said on Wednesday.

“This solar farm will see renewable energy added into Korea Zinc’s mix of base-load power required to run its zinc production line – with the solar farm supplying about a third of the refinery’s current baseload power needs.

“Use of renewable energy in this way not only demonstrates it as a reliable energy source for large-scale industry, but that Korea Zinc is committed to the people of North Queensland, to minimising carbon emissions and protecting the Great Barrier Reef,” he said.