Sydney-based utility Origin Energy signed a 15-year power purchase agreement (PPA) for the output, including 100% of the electricity and the Renewable Energy Certificates (REC), generated by a 56 MW PV farm near Moree, New South Wales. As estimated, the new plant will produce 145 GWh of energy annually, which is enough to power about 24,000 Australian households.
Moree farm is the largest solar project in Australia deploying crystalline silicon PV modules. It is also the first large-scale solar project in the country that uses a single-axis tracking system, which allows PV modules follow the sun during the day to maximize the energy generation. The plant, which is comprised of almost 223,000 solar modules, was completed by Spanish solar developer Fotowatio Renewable Ventures in February of this year.
Solar technology has improved dramatically over the past few years and the cost has come down as a result. There has never been a better time for Origin to pursue large-scale solar opportunities, said Origins CEO of energy markets Frank Calabria.
The new solar agreement will help Origin to meet its liability under the Federal Governments Renewable Energy Target, which was revised in June last year. The new target for 2020 is to generate 33,000 GWh of renewable energy annually, which is about 23.5 % of Australias energy mix.
The 15-year contract for Moree PV farm is Origins first solar PPA. The company also has nine offtake agreements with wind farms in South Eastern Australia. According to the press release, Origin will continue growing its renewable portfolio, including utility-scale solar projects. The company is planning to build a 200 MW PV plant in Darling Downs; this project has been recently shortlisted for funding by ARENA.
ARENA congratulated the Moree Solar Farm on signing the PPA with Origin today. The renewables body, which was effectively defunded by the Australian Federal Government in a policy announced last week, said that FRV have pioneered a new business model for realizing large scale renewables in Australia through the project. ARENA CEO Ivor Frischknecht noted that FRV was able to reach financial close on the project before signing a bilateral PPA, by being willing to sell the electricity the Moree project produces and its Large Scale Renewable Certificates on the spot market.
In doing so FRV has pioneered an alternate PPA pathway for project developers in the development and construction phase of large-scale solar PV projects," said Frischknecht. "This could encourage other renewable developers to consider taking on market risk, and therefore result in more large-scale renewables being developed.
Both ARENA and the Clean Energy Finance Corporation (CEFC) worked together to bring the Moree Solar Farm project to financial close. ARENA supplied a AU$102 million grant and the CEFC AU$47 million in debt financing. ARENA noted the funding model demonstrates how the two organizations can work in distinct yet complimentary ways. ARENA’s Frischknecht said that the body’s participation in the Moree Solar Farm, among others, assisted it and the CEFC in formulating, assess applicants and move forward with their complimentary large scale solar programs.
ARENA says that 22 PV power plant projects worth 766 MW have been asked to supply full applications under the joint program. The projects in total are worth AU$1.68 billion and collectively have sought AU$332 million in grant funding.
ARENA, rather pointedly, notes that none of the projects would proceed "in the near future" without grant funding.