CEFC accelerates large-scale solar construction in New South Wales with $150 million investment

1 February 2017

Regional New South Wales will benefit from a $150 million investment from the Clean Energy Finance Corporation (CEFC), to accelerate the construction of three major solar projects with a total value of $230 million.

The three large-scale solar farms will be built in Dubbo, Parkes and Griffith in regional NSW. They are the first projects to receive debt finance under the CEFC's large-scale solar financing program and, together, represent the CEFC's most substantial commitment to large-scale solar to date.

Project owner and developer Neoen expects the three projects will create an estimated 250 jobs during construction in 2017 and, once operational, will produce enough renewable energy to power some 41,500 homes.

The CEFC has committed some $150 million in finance towards the $230 million total cost of the three NSW projects. The projects have also received $16 million in grant funding from the Australian Renewable Energy Agency (ARENA) under its large-scale solar funding round.

CEFC Large-Scale Solar program lead, Gloria Chan: "Our investment in these new projects at Dubbo, Parkes and Griffith will see the rapid delivery of 110MW(AC) of new solar generation capacity in New South Wales, increasing the state's large-scale solar capacity by more than 50 per cent.

"While we have seen increasing investment in renewable energy in Australia, there is still a large investment gap that the CEFC is working to close so we can meet the Renewable Energy Target.

"The CEFC has a significant pipeline of solar projects and we are looking forward to confirming additional financing commitments as soon as transactions are finalised. When fully deployed, our large-scale solar program will represent the largest lending commitment to the large-scale solar sector in Australia to date. Through this program we have seen a significant reduction in the cost of solar energy to the point where it is very competitive with other forms of electricity generation."

The three regional NSW developments will see the involvement of a new energy offtaker in the solar sector, with Neoen entering into Power Purchase Agreements with ENGIE in Australia for the sale of energy generated from the Parkes and Griffith sites. Neoen will operate the Dubbo plant on a merchant basis.

Neoen Australia Managing Director Franck Woitiez said: "The achievement of financial close for our three large-scale solar farms in New South Wales is another step towards Neoen's goal of owning and operating 1 GW of renewable energy assets in Australia.

"With long-term debt finance from the CEFC, and the support from ARENA, Neoen continues to invest in the future of the Australian energy mix, and deliver on its promises of building sustainable, competitive and renewable electricity."

The three NSW projects all feature single-axis tracking technology, which is more efficient in capturing the sun's energy than fixed solar PV. The projects will generate energy to meet strong local demand. The sites have recorded relatively high levels of solar radiation and existing infrastructure has helped minimise construction costs. 

The projects are:

• A 55MW solar farm 10km west of Parkes, consisting of 206,000 solar panels across 210 hectares and expected to generate enough solar to power about 20,500 homes
• A 30MW solar farm south-east of Griffith, consisting of about 112,000 solar panels and expected to generate enough solar to power about 11,500 homes 
• A 25MW solar farm over two sites, one east of Dubbo and one north of Narromine, consisting of about 80,000 solar panels on 80 hectares across both sites. The Dubbo Solar Hub is expected to generate enough solar to power about 9,500 homes.

Bouygues Construction Australia is the EPC contractor for the three solar farms. Pierre-Eric Saint André, CEO of Bouygues Energies and Services Power Division said: "Bouygues Construction is proud to accompany Neoen on its successful journey in Australia. Our global track record in solar and local footprint, created by working for more than 20 years in Australia, has been key to securing these projects. Working with local stakeholders such as suppliers and contractors will be essential for successful project delivery and performance."

Parkes Shire Mayor, Councillor Ken Keith OAM said: "Parkes Shire Council and the wider community have been early adopters of solar energy, with Council installing a significant number of solar panels on its buildings. There has also been a good take up by the community of a bulk purchasing scheme for solar panels on residential homes throughout the Parkes Shire. With climate change having an impact on the rural sector, we are delighted that this major investment in renewable energy will take place in our Shire. This will be the first of two solar farms planned for the Parkes Shire which is geographically well situated in the centre of the state."

Green Energy Markets estimates that around 5,600MW of new capacity will be required to meet the 2020 Large-scale Renewable Energy Target, with generation from wind, large-scale solar and hydro currently making up just 15 per cent of output in the National Electricity Market in 2016. The CEFC has previously invested in large-scale solar in regional NSW, with a $47 million commitment to the 56MW Moree Solar Farm, and will be announcing further investments in 2017.

ABOUT NEOEN

Neoen is an independent power producer, generating electricity from renewable sources (solar, wind or biomass). Neoen develops, finances, builds and operates plants and is active in France, Portugal, Australia, Mexico, Egypt, Mozambique, Jamaica, Zambia, Jordan and El Salvador. With a current operating base of 1000 MW, Neoen seeks to achieve installed power of over 3,000MW by 2020. In Australia, Neoen owns and operates the South Australian Hornsdale Wind Farm (309MW) and the Western Australian DeGrussa Solar and Storage plant (10.6MW). Founded in 2008, the company is a subsidiary of Impala SAS, a diversified investment group with over 6,000 employees and a global presence, of Bpifrance, the French public investment bank, and of private equity firm Omnes Capital. www.neoen.com

ABOUT BOUYGUES CONSTRUCTION

Bouygues Construction is a global player in construction, with operations in more than 80 countries. It designs, builds and operates projects in the sectors of building, infrastructure and industry with successful construction and operation of photovoltaic plants across France, Thailand, The Philippines and the United Kingdom. As a responsible and committed leader in sustainable construction, Bouygues Construction sees innovation as its primary source of added value: this is "shared innovation" that benefits its customers at the same time as improving its productivity and the working conditions of its 50,000 employees. In 2015, Bouygues Construction generated sales of €12 billion.

ABOUT ENGIE

ENGIE develops its businesses (power, natural gas, energy services) around a model based on responsible growth to take on the major challenges of energy's transition to a low-carbon economy: access to sustainable energy, climate-change mitigation and adaptation and the rational use of resources. The Group provides individuals, cities and businesses with highly efficient and innovative solutions largely based on its expertise in four key sectors: renewable energy, energy efficiency, liquefied natural gas and digital technology. In Australia, the company operates 3,550MW (gross) of renewable, gas-fired and brown coal-fired plants in Victoria, South Australia and Western Australia. Its retail business, Simply Energy, services more than 600,000 customer accounts in Victoria, South Australia, New South Wales and Queensland.

ABOUT ARENA

ARENA was established by the Australian Government to make renewable energy technologies more affordable and increase the supply of renewable energy in Australia. Through the provision of funding coupled with deep commercial and technical expertise, ARENA provides the support needed to accelerate the development of promising new solutions towards commercialisation. ARENA invests in renewable energy projects across the innovation chain and is committed to sharing knowledge and lessons learned from its portfolio of projects and information about renewable energy. ARENA always looks for at least matched funding from the projects it supports and to date has committed $1.1 billion in funding to more than 270 projects. For more information, visit arena.gov.au