Image: Greater Shepparton City Council
Greater Shepparton City Council announced last week it intends entering into a lease arrangement for a site that will host a proposed $40m solar farm.
The proposed lease would be with GVCE Mooroopna Solar Pty Ltd. for GV Link land near Mooroopna, east of Toolamba Road and the railway line.
A council news item notes GVCE’s solar farm project “will be able to generate up to 23MW per annum”, which doesn’t make sense1. According to unconfirmed minutes from last week’s meeting, GVCE had originally submitted a proposal for a 12MW solar farm, but it seems likely it will be larger and Council is making assumptions based on the facility having a *maximum output capacity* of 23MW. At that capacity, the facility could generate approximately 35,600MWh (megawatt-hours) of electricity per annum and more if trackers are used.
The principal terms of the proposed lease include an initial period of 25 years, with a further 25-year option. Annual rental for the site would be $30,000.00 plus GST, subject to Consumer Price Index adjustments at regular intervals and a review should the additional 25-year option be taken up.
Akuo Energy Involvement
The minutes also make reference to France’s Akuo Energy being involved. We mentioned last week the company was kicking off in Australia with the construction of a 4.98MW solar farm in Renmark, South Australia. Akuo indicated it intended investing an additional $238 million in renewable energy projects across the country.
The Mooroopna lease would be subject to various conditions, including GVCE gaining the necessary approvals, finance and power purchase agreements for offtake of the electricity generated by the facility.
“Officers believe that an appropriate level of negotiation of the proposal has now occurred and the matter is now ready to be the subject of the statutory process of public notice and consultation before Council makes a final determination in respect of the matter,” state the minutes.
Not All Sunshine For Big Solar In Shepparton
Greater Shepparton Mayor Cr Kim O’Keeffe said renewable energy is a key focus across the region and the state. Shepparton has become a hotspot for large-scale solar energy interest; creating a few headaches for Council due to community concerns mainly relating to the use of agricultural land.
Last year Council indicated it wished to start referring some applications to the State Government for decisions. In July this year, Victoria’s Minister for Planning called in four solar farm permit applications at Greater Shepparton Council’s request – Tallygaroopna (68MW), Congupna (30MW), Lemnos (100MW) and Tatura (45MW). The Minister subsequently referred the submissions made in response to those applications to an independent Panel. Congupna was given the green light in October, but decisions on the other projects were deferred until further strategic work is completed for the Goulburn Murray Irrigation District.
Footnotes
- See this article from The Good Solar Guide : The Difference Between Power And Energy ↩
About Michael Bloch
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I can’t see how some of these large scale solar plants can make any money when some are selling power back at 3.2c per Kwh, Building one them now must be approaching a loss making venture if they are not already.
At 3.2c per Kwh it goes to show if anyone has factored in selling excess power to finance their installation they might have to re do their sums as the feed inlet tariff can only go one way backwards
https://www.abc.net.au/radio/programs/am/dropping-solar-costs-putting-pressure-on-local-companies/10579842
https://www.abc.net.au/radio/programs/qld-country-hour/qld-country-hour/10618508
If they spend $40,000 on a 23 megawatt solar farm with single axis tracers that will generate perhaps 44,000 megawatt-hours per year. If they only received 3.2 cents per kilowatt-hour that would only give a return of $1.4 million a year, which obviously isn’t much. It’s only about 3.5% return. But as the average wholesale price in Victoria over the past year has been 8.85 cents per kilowatt-hour they should be able to do much better than that. In addition there are LGCs (Large Scale Generation Certificates) that can be created and sold but they won’t be worth much in a year’s time.
There is the very likely probability of daytime electricity prices will fall in the future and so you will generally find solar farms only get built if they can lock in a guaranteed price with a Power Purchase Agreement (PPA).
I have a friend who has a 400 acre disused section of a cane farm that someone put an option on to build a solar farm two yrs ago and twice it has fallen over due to lack of finance.
After seeing some of the reports on viability of new solar farms it would seem that without an adequate return no one is going to lend money.