Victoria’s biggest solar farm reaches financial close, to power steel works

The Numurkah solar farm – which at 100MW (AC) will be the largest solar facility in Victoria, at least for a while – has reached financial close and will begin construction next week.

The $198 million facility will help power the Laverton step works in Victoria, under a ground-breaking deal signed with Sanjeev Gupta’s GFG Alliance, and will also take French developer Neoen to 1GW of renewable energy assets in Australia.

Numurkah, located near Shepparton in the Goulburn Valley the north of Melbourne, has also signed a deal with the Victorian government for the supply of renewable energy certificates towards its tram network.

The first panels will be installed in October, with completion expected next May.

“Numurkah is an important project for Neoen, firstly because it marks the achievement of our first Gigawatt of projects in Australia, either under construction or in operation,” Neoen Australia chief executive Franck Woitiez said in a statement.

“Secondly, because the Victorian Government and Zen energy are long-term partners for Neoen and this project proves that collectively, we are moving towards our aim of delivering sustainable, reliable and competitive energy to all Australians.”

The Clean Energy Finance Corporation, which is providing $56 million in loans towards the project, says it is a “path-breaking example of how solar energy can deliver a cost-effective solution for Victoria’s energy-intensive manufacturers.”

CEO Ian Learmonth high grid electricity prices, high gas prices and unfavourable contracting conditions have put pressure on tight operating margins for manufacturers.

“The lower cost of solar, combined with these types of commercial power purchase agreements, offer manufacturers welcome control over their energy use,” he said.

Numurkah is just none of a number of wind and solar projects that are being signed up by big manufacturers and other energy users – including Sun Metals, Telstra, Carlton United Breweries, Mars Australia, Orora, and others.

Gupta’s GFG Alliance, through its Simec Zen Energy unit, will also build more than 1GW of solar and storage in South Australia, and contract other facilities, to provide cheap renewable power to the Whyalla steelworks and other big energy users in that state and elsewhere.

Readers may remember that the deal with Gupta was signed in May in the presence of prime minister Malcolm Turnbull and French President Emmanuel Macron. Turnbull claimed the credit and gave no acknowledgement of the key role of the Victoria government.

In a statement on Friday, Victoria energy minister Lily D’Ambrosio said: “We’re supporting the renewables sector to create local jobs and deliver affordable, clean energy. We’ve backed the Numurkah solar farm every step of the way to drive down energy prices, create jobs and reduce emissions.”

Neoen’s Woitiez says he is still scratching his head about the federal government’s climate and energy policies, and why it refuses to be more ambitious about emissions reductions and the transition to clean energy.

The final proposals made by the Energy Security Board and the federal government for the National Energy Guarantee this week admitted that the government’s 26 per cent target for 2030 will be delivered by 2021, because of the renewable energy target. But there is no plan to seek more emissions cuts.

“There is no point in not being ambitious,” Woitiez told RenewEconomy. “You spend a lot of time trying to convince people and parties (about policies). But this is the future. The uptake of renewables is not going to stop.”

The main reason, Woitiez says, is that more and more corporates are looking to wind and solar to lock in cheap electricity prices, which they are able to do through “firming” contracts and other financial instruments.

“There is huge interest in corporate demand. A lot of global and national organisations are looking to  buy renewable energy – they not valuing the certificates, they like the long term stability of renewables, and because it is more competitive than coal.”

Neoen has been at the forefront of renewable energy development in Australia, and Woitiez says the 1GW mark makes it the biggest IPP (independent power producer) in the country that is 100 per cent focused on renewables.

Neoen owns the Tesla big battery, also known as the Hornsdale Power Reserve, located next to the 315MW Hornsdale wind farm, and has also built the Griffith and Parkes solar farms, and the Dubbo solar hub, which have been completed.

It is also building the Bulgana green energy hub, which will combine a 175MW wind farm and another Tesla big battery to power the new Nectar Farms greenhouse facilities, and plans two other major hubs combining wind, solar and storage in north Queensland and South Australia.

Other than the CEFC, the Numurkah solar project sourced funds from Vantage Infrastructure, an independent specialist investment manager, as well as German Landesbank NORD/LB.

Downer EDI has been awarded the engineering, procurement and construction (EPC) contract for the power plant. At the peak of construction, the solar farm is expected to create up to 300 new jobs for the Numurkah region.

The solar farm is rated 100MW (AC) and 128MW (DC) and will generate more than 255GWh a year.