Two of the big solar farms caught up in newly confirmed congestion problems in the New South Wales grid – revealed by RenewEconomy on Monday – have been pulled from sale.
Sources have confirmed to RenewEconomy that UK infrastructure investor John Laing has withdrawn the majority-owned Sunraysia solar farm and the wholly owned Finley solar farm (pictured above) – both located west of Wagga Wagga – no longer form part of the package of Australian assets that it has put up for sale.
John Laing began the sales process earlier this year, as it announced the halt of all new investment in wind and solar assets in Australia because of growing frustrations over project delays and transmission losses, and a major write-off of some of its investments in Australia. It said at the time that the Australian market was simply “too hard.”
The 200MW Sunraysia solar farm has been left standing, unused for more than a year because of its failure to obtain registration by the Australian Energy Market Operator. It is unclear what the problem is, but the issue has sparked a bitter legal battle between the project owners (John Laing 90 per cent and Maoneng 10 per cent) and the main contractor Decmil.
RenewEconomy understands that the uncertainty over the Sunraysia connection – registration may not occur until later this year, and AGL says its off take will not commence until 2023 – led to the decision to exclude if from the sales process, and it made sense to do the same with the 137MW Finley solar farm, given the operational and due diligence synergies between the two solar projects for subsequent sale under a single transaction
Finley, however, has also been caught up in grid congestion issues, despite the expense of installing a synchronous condenser, and both the Finley and Sunraysia solar farms are included in a group of wind and solar facilities that have been warned of “material” constraints on their output because of congestion in that part of the grid.
The decision to exclude the solar farms from the already delayed sales process leaves John Laing’s wind assets as the only ones on offer. These include the Granville and Kiata wind farms, as well as small stakes in each of the three stages of the Hornsdale wind farm in South Australia.
Both Decmil and John Laing are expected to give updates to the legal fight and claims and counter-claims over the Sunraysia problems when they release their respective six month results in the coming weeks. The brawl has prompted Decmil to follow other big contracting companies and withdraw from full EPC contracting and focus only on less risky balance of plant contracts for wind and solar farms.
As RenewEconomy reported earlier this week, nearly a dozen mostly solar projects built on the grid west of Wagga Wagga face material constraints because of new modelling from Transgrid that shows the possible loss of voltage control stood one of the main transmission lines goes down.
Transgrid is seeking regulatory approval to upgrade that part of the network, but that won’t happen for four to five years, and in the meantime a limit of 300MW of power flowing east (back towards Wagga Wagga) from the solar projects has been imposed.
The flow east already peaks at 200MW yet there is more than 740MW of new capacity about to join the grid in coming months, and another 400MW in the pipeline.
The issue may be slightly ameliorated by a new proposal to build the world’s biggest compressed air energy storage facility at Broken Hill, helping to create one of the world’s biggest renewable energy micro-grids along with the existing Silverton wind farm (200MW) and the Broken Hill solar farm (50MW).
That facility – possibly sized at up to 200MW with 1550MWh of storage – would absorb much of the excess wind and solar flowing from Broken Hill, but even this, if it does go ahead, will not be complete before late 2023.
It is not clear which solar farms would be affected most by these congestions issues. Andrew Kingsmill, the head of at Transgrid, told RenewEconomy after a webinar announcing the company’s transmission plans, and the Broken Hill micro-grid that it was difficult to predict in advance.
This would be driven by the National Electricity Market’s dispatch engine, and depend on various factors, including pricing, location, marginal loss factors (transmission losses), other constraints in the network and electricity flows elsewhere in the network.
As RenewEconomy noted earlier this week, one option might be to add battery storage to a solar facility. But unless this is “behind the metre”, the benefits of the battery will be shared with all, under the rules of the market. If it is located behind the metre, then the solar farm’s GPS (performance standards) will need to be re-negotiated, and that’s a potential headache and risk that few would entertain.
The congestion issues and the constraint warnings came despite the fact that some of the project owners, including Octopus Investments, which has a share in the Darlington solar farm, had boasted of siting their 275MW facility – likely the biggest in the country when registration is completed in coming weeks – was in the “ideal position at the heart of NSW and Victoria’s electricity grid.”
“Darlington Point has been stratically located,” the video says, noting its potential to leverage the existing high capacity transmission line networks, its location next to a major sub-station that feeds directly to the neighbouring 330kV network, making it the only solar farm to be located next to such a high capacity line. And on top of that, it has installed two synchronous condensers to help stabilise the grid.
All of that is true, but it still not yet clear how that will place the solar farm in the congestion issues foreshadowed by Transgrid, although it does seems possible that one of those syncons could have been chosen by AEMO to help solve separate “system strength” issues in that part of the grid, so that could give it more revenue.
Other potential candidates for that contract include the syncons at Finley Point, and at the Kiamal solar farm in Victoria, but AEMO is yet to confirm these contracts, even though it flagged at a recent webinar on the West Murray connection issues that the immediate system strength problems had been largely resolved.