FRV is one of the most established developers in Australia, having secured and developed six projects with power purchase agreements (PPAs) for a total of more than US$700 million in investment. Which states and regions are the most attractive for you as a developer, and why?
We have invested in all the eastern states except Tasmania. Our operating projects and projects under construction are located in the Australian Capital Territory, Queensland, New South Wales (NSW), and Victoria, and we have a project at an advanced stage of development in South Australia. We plan to keep investing across all these states, but, of course, each state has its peculiarities. For example, electricity prices and load differ from one state to another. However, it is more about the specific location of the project itself.
So, wherever a project makes sense in terms of grid and demand, we develop. We have a long-term view of the market, notwithstanding short- or mid-term issues that may affect some parts of the grid or states.
Announcements, surveys, and reports continue to pile up, showing a massive drop in investor confidence in Australia due to network woes and policy uncertainty. Has this caused you to review your plans in the country?
The short answer is no. Our projects have been little or not at all impacted by grid constraints and curtailment, so we will not be changing too much in the way we’ve been doing business from the very beginning. We do a lot of preparatory grid and connection analysis during the development process, and we know this market very well, so we know where to go and where not to go. We develop our own projects but during the past couple of years, we have decided to acquire projects from other developers to expedite the growth of our portfolio, always targeting strong parts of the grid.
Nonetheless, policy uncertainty and grid issues remain serious problems. We have been working with the Clean Energy Council and other investors for these issues to be addressed by the government, however we remain positive and we continue investing, hoping for a more clear energy policy at federal level.
Despite the massive drop in investor confidence, Australia is poised for a record rollout of big PV this year [prior to the Covid-19 outbreak]. All things considered, where do you see the market heading?
I believe the market is heading toward consolidation. We are already seeing some big investors leaving the market, and many small companies that are struggling to survive. Sometimes we are approached by smaller developers, including some based overseas with a small office and presence in Australia, requesting support. They started developing projects here but, in some cases, they did not have enough experience or funds to keep going and overcome the increasing market complexities. Another key trend is new technologies, including large-scale storage. This would improve the generation profile of non-dispatchable generators, adding ancillary revenues while improving the overall stability of the grid, rather than just selling electricity.
FRV pledged last December to develop storage projects globally and announced its first one in the United Kingdom. Are there any such plans in place for Australia?
Most of our PV projects are designed to add battery storage at a later stage and we are working on a couple of concrete opportunities that will be implemented soon. In Australia, we have a dedicated team looking only at storage opportunities and new technologies. We are also considering adding batteries to our existing projects, however only when this is feasible or it makes sense – feasibility has to be analyzed case by case.
The Australian Energy Market Operator (AEMO) has been talking about too much inverter-based generation in some parts of the Victorian and New South Wales grid affecting system strength, with five projects curtailed by 50% since September last year. How does your company go about choosing inverters?
It is always a combination of price and quality. At FRV, we are technology-agnostic, so every time we have a new project developed, we work very closely with our EPC contractor to make sure we choose the right technology for each project. In Australia, it is probably even more important than in other parts of the world to make the right decision in this regard because of very strict grid modeling and compliance requirements. The preparation of the connection information and modeling usually takes several months – it can vary depending on the project – and the quality of the inverter and the inverter’s manufacturer modeling input is key. Therefore, the inverter supplier plays a critical role, as they need to provide extensive information and help us in preparing the Generation Performance Standards application for AEMO and the transmission companies.
If you make a wrong decision with inverters and discover that six months later, you’ll need to start the entire process from scratch. In the end, you can lose up to one year or so. Therefore you really need to choose a technology partner that understands the market and the grid and can offer a top-notch product that is fit for purpose, so you can be sure your plant will not create any imbalance to the system and is easily approved.
For the Winton Solar Farm, FRV is using Huawei string inverters. What advantages do you expect to find in using Huawei’s technology?
We are very excited about our partnership with Huawei on the Winton project because this will be the first large-scale solar farm in Australia to use string inverters. It is a significant achievement for both companies, and it has been an exciting journey, given the novelty of this technology. We have had an excellent collaboration with Huawei. Their products provide a credible option for solar farm developers in Australia, and we believe that string inverters are a very good solution for the peculiarity of the Australian grid. One of the greatest strengths of Huawei was their experience in handling the complex GPS modeling, and together we managed to prepare a comprehensive application to submit to AEMO and Victorian network service provider AusNet.
To support Australia’s energy transition, the Winton Solar Farm will fund a research program at the University of Melbourne. What can we expect from this project?
The research is aligned with FRV’s goals and the goals of the Victorian government. It aims to better understand the technical and regulatory constraints and opportunities for distributed renewable energy, as well as the social impact and equity implications of community energy projects.
The research aims to empower rural Victorian communities by supporting local investment in and ownership of energy infrastructure, as well as support the state of Victoria’s energy transition. It also seeks to contribute to the economic growth and new job creation through innovations in technology and governance that will position Victoria’s businesses at the leading edge of international renewable energy markets.
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