“Technical problems” blamed for long delays at Australia’s biggest solar farm

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Enel Green Power blames “technical problems” for delays at Australia’s largest solar project which is yet to reach full production.

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The owners of what should be Australia’s biggest solar farm are blaming “technical problems” for the massive delays which have prevented the project reaching full production, more than a year behind the original schedule.

The Bungala solar farm – located near Port Augusta in South Australia and jointly owned by Italian company Enel Green Power and the Dutch Infrastructure Fund – is supposed to be the biggest in the country at 220MW (AC), or 275MW (DC).

It has been built over two stages, but while the first stage is operating at its full capacity of 110MW, the second stage – originally due for full commissioning in late 2018 – has been stuck at a “hold point” of around 20MW since early this year.

Delays in connections and commissioning have become common place in Australia for new wind and solar farms, due to a combination of the growing complexity of connection requirements, technical problems, and/or the overwhelming workloads on network owners and the market operator.

The delay to Bungala, however, is the most significant that we can find, challenged only by the Kennedy Energy Hub, the wind, solar and battery hybrid project in north Queensland that has been mechanically complete since late last year, and is still waiting for its generator performance standard.

The failure to secure the GPS has now led to a legal dispute between Kennedy’s owner Windlab and the EPC contractors Qanta Services and Vestas.

Enel Green Power, the renewable offshoot of Italian utility giant Enel, would not comment in great detail about the issues at Bungala.

“The delay is due to some technical problems at the connection point detected during the commissioning phase and we are now working to fix these problems,” a spokesman told RenewEconomy via email.

“We do not disclose our contractors.”

The contractor, however, is clearly Spanish group Elecnor, which boasted of the contract win in a series of stock exchange announcements in 2017 and 2018, in which it described the project as the “most ambitious such project to date” in Australia.

Elecnor also won the contract for a proposed third stage of the Bungala project, which was to add 80MW of solar and some battery storage, but is yet to begin construction. Elecnor has also built the Barcaldine and Moree solar projects in Australia.

Bungala is the first investment in Australia for Enel Green Power, which is a big company that manages more than 43GW of renewable energy capacity across 29 countries, of which around 29GW is hydro, nearly 11GW wind, and more than 3GW solar.

It said in 2017 that it expected the Bungala project to be fully operational by late 2018, and in 2018 said it should be fully operational by early 2019. The output is contracted to Origin Energy.

Bungala Two has been generating power, but has been limited at a “hold point” of around 20MW since June. These hold points are imposed by the market operator at various capacities until it is satisfied that all standards can be met and the output can be increased.

This graph from Global Roam, providers of our popular NEM-Watch widget, and from its NEMReview database, shows the production from Bungala 2 over the last 13 months. Interestingly, it shows that Bungala 2 was producing at around 40MW for a while late last year, before being ramped down.

The regular spikes show its capacity, and presumably comes from testing. Still, the flat line above the orange shading shows that by and large it is “held” at 20MW, meaning that the solar farm has missed out on most of its revenue opportunities, which could amount to more than $1 million a month in foregone revenues.

Such situations have resulted in claims of “liquidated damages” between owners and EPC contractors, but there is no word on whether this has happened in this case.

Enel Green Power also owns the smaller 27MW Cohuna solar farm in Victoria, which is under construction but ran into issues with its contractor Tempo Services Australia over cost over-runs, leading to the suspension of Tempo’s shares and a revised contract.

Coincidentally, Tempo announced on Tuesday that is has signed that new contract, without providing any  details.

There are currently only two large scale solar farms in South Australia – Bungala (one and two), and Tailem Bend (95MW AC), although many more are planned, particularly when a new inter-connector is built to link the state to NSW.

South Australia’s renewable electricity mix, which accounted for 52 per cent of generation last financial year, and more than 60 per cent over the last two months, is dominated by wind energy and rooftop solar. For the last two months, the state has recorded the lowest average wholesale electricity prices in the main grid.

 

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