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RCR Tomlinson Solar Farm Writedowns

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Australian solar contracting company RCR Tomlinson has taken a $57m write down on the Daydream solar farm and the Hayman solar farm, which are owned by Edify Energy and to be installed in North Queensland.

RCR Tomlinson Solar Farm Writedown

We reported earlieir this year on the Hayman and Daydream solar farms and how First Solar will be handling the installation for Edify – at that time everything looked rosy but it appears that a couple of major factors have led to cost and time delays. Edify have cited “external” delays, bad weather, and local issues like poor ground quality.  Also being blamed are the increasingly stricter requirements being imposed by the Australian Energy Market Operator which are affecting solar farms Australia-wide. 

RCR Tomlinison Daydream solar farm in Collinsville, Queensland.
RCR Tomlinson -Daydream solar farm in Collinsville, Queensland. (source: thewest.com.au)

As of last year, RCR have over half a Gigawatt of large-scale solar projects in their order book and over a Gigawatt currently being developed or progressed under early contractor involvement processes, according RCR Managing Director & CEO, Dr Paul Dalgleish (who has since left RCR). As a result of the writedown RCR are now attempting to raise $100m from investors and have had to offer a significant discount on RCR shares on a one-for-1.65 basis at $1 each. This represents a ~65% discount on the stock’s last trade price ($2.80).

According to RenewEconomy, Tomlinson has written down $57 million on the $315 million contract values for both the 150MW Daydream and the 50MW Hayman solar farms owned by Edify Energy. They’re both located in North Queensland and both nearing completion.

A statement to shareholders noted that: 

“These project-specific issues required the Company to continuously revise its execution methodologies to mitigate delays, leading to increases in subcontractor costs (both people and plant) and logistics cost overruns.

“As a result of these cost overruns that arose over the life of the Project, RCR has realised cumulative write- downs of $57 million from the tendered margin on the Project.”

Some bad news for solar farms in Australia but we have no doubt that these projects will end up completed and can start making their investments back. We’ll be watching closely how the AEMO’s ongoing changes to legislation affects the many other solar farms currently in various stages of completion/operation. 

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Pilbara Solar Farm | Alinta Planning Off Grid Solar Farm

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Alinta Energy have applied to the Western Australia Department of Water and Resources to clear 160 hectares at the proposed site of its Pilbara solar farm. 

Pilbara Solar Farm | Alinta Energy

Pilbara Solar Farm Alinta
Pilbara Solar Farm by Alinta Energy (source: AlintaEnergy.com.au)

The planning application send through to the department is for permission to clear the 160 hectares of the site and also lays out a planning application for the Pilbara solar farm. 

“The clearing will be required so that Alinta Energy Transmission (Chichester) Pty Ltd (Alinta) can build, own and operate a solar field located adjacent to Fortescue Metals Group’s (FMG’s) Christmas Creek Substation in the Pilbara region of Western Australia (the Project),” the application says, according to RenewEconomy, who have quoted ‘solar industry insiders’ who estimate the size of the solar farm to be around 60MW (Alinta haven’t announced the size of the proposed farm yet).  

“The Project will supply FMG’s Christmas Creek mine site with power to support ongoing mining operations” the report continues.

It’s understood that the project will probably use single axis tracking and hopefully usurp the current energy for the Christmas Creek mine – an expensive and ecologically unfriendly 58MW diesel plant. This goes to show how important renewable energy in resources is – especially when you’re dealing with a site far from the grid. Some of these mines use an astronomical amount of power and having as much as possible of that power requirement coming from renewable energy is a fantastic step in the right direction for the resources industry in Australia. 

Last month Alinta made a development application for the 65km energy transmission line which would link the Christmas Creek mine with the Cloudbreak mine – so this gives us a bit of an idea as to what they are hoping to achieve in the future. Don’t be surprised if you hear more about this solar farm and a whopping great battery to go with it! Watch this space. 

 

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Aldoga Solar Farm | Construction & Energy Submission

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The Aldoga solar farm in Gladstone has lodged documents with the Federal Government and is one step closer to wards commencing the construction phase. 

Aldoga solar farm

Aldoga Solar Farm Gladstone Aerial Shot
Aldoga Solar Farm Gladstone Aerial Shot (source: dsdmip.qld.gov.au)

The Aldoga solar farm is to be designed, built and operated by global energy giant Acciona Energy, who have been in Australia since 2002 and certainly know the lay of the land. It will be a 265MW farm and Acciona have already signed a 30 year lease with the State Government. It will be located at Aldoga over 1,250 hectares and is hoped to act as a “precedent for the delivery of further economic opportunities offered from a growing renewable energy sector.”

State Development, Manufacturing, Infrastructure and Planning Minister Cameron Dick announced in April that Acciona Energy was chosen out of 16 applicants to build the solar farm in Gladstone.

“Combined with the renewable energy that will be generated, and the lease payments that will be made to the state, this project represents a major boost to the local community – economically, environmentally and socially,” Mr Dick said.

According to the report Acciona provided to the Department of Environment and Energy on July 6 (you can click here to view it), the farm will use solar panels with single axis tracking so that harvested sunlight can be maximised. 

“There is an alternative option to install a fixed-tilt mounting structure; however, preliminary studies suggest that the single-axis tracker will be more desirable from an energy production perspective,” the report said.

At maximum capacity (265MW AC), the project is estimated to supply up to 122,000 households (or 5x the amount of households in all of Gladstone). It will have a massive amount of solar panels to reach the 265MW – over one million!

It’s estimated that around 240 solar jobs will be created – with Acciona Energy adopting Buy Queensland and Gladstone Buy Local procurement policies, giving preference to local sub-contractors and manufacturers.

According to the Gladstone Observer, construction is set to run between October next year and November 2020, with the farm operating from Nov 2020 – Dec 2050. Wonder what a solar farm will look like then? 

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Bookaar Solar Farm | Timeline, Opposition & More

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The $150m, 200MW Bookaar Solar Farm in Victoria is set to start construction in July next year, if local residents trying to scupper the plans don’t have their way.

Bookaar Solar Farm

Bookaar Solar Farm Location
Bookaar Solar Farm Location (source: Google Maps)

The 200MW Bookaar Solar Farm will feature around 700,000 solar panels, according to the ABC. It is located 10 km to the north of Camperdown, in South West Victoria. It’s being developed by Bookaar Renewables Pty Ltd (a partnership between the landowners and Infinergy Pacific)

According to the official website, there are six main reasons they chose that particular location:

  • Good degree of flat land within the land holding.
  • Good solar resource.
  • Simple grid connection options onsite, with capacity on the lines for the required generation size.
  • Extensive farming land.
  • Good transportation links and site access.
  • Low visual impact – they are hoping to add to existing screening by planting a vegetation screen around the perimeter of the solar farm so neighbour views aren’t as obstructed.

During the construction period it is estimated that the project could provide jobs for up to 150 workers over the course of a year and more.  Following this, 12 full time local jobs will be created over the 30 year operational period of the project. 

The project’s Planning Application and Assessments will be submitted to the Corangamite Shire Council in May 2018.  If approved, construction will begin in late 2019 and be completed by late 2019 or early 2020. 

“The development would be operational for 30 years, after which it would be decommissioned and the site returned to its pre-development status,” the application to council states.

With that said, there is still some solar farm opposition due to its planned size.

Bookaar Solar Farm Opposition

The farm is estimated to be around 6 square kilometres in size, in comparison to Camperdown (where the farm will be built near) which is only 4 square kilometres. As a result, some of the residents are a little uneasy about the impact this farm may have on their investments/lives.

Over 30 people turned up to a meeting a fortnight ago where the Boookaar Community Action Group discussed the ‘immense’ size of the project. 

“The clincher is that it’s 605 hectares, over 1500 acres, just by sheer size it’s an immense problem,” Chair of the group Andrew Duynhoven told the meeting.

“The actual solar farm is the size of Camperdown, plus a quarter.

“It’s massive. It’ll probably be the biggest solar farm application in Australia at the moment.”

Dynhoven elaborated that he is pro-solar but the ‘sheer scale’ of the farm is making them nervous:

“I’m not against solar. I’d love to have solar on the dairy, and in the near future that will occur, but I’m against the sheer scale of this.”

Given the small size of Camperdown and the big solar farm, it is more understandable than most solar farm NIMBY opposition. The residents are also concerned about glint, glare, and the classic: using ‘prime agricultural land’ to build a solar farm. 

A public information meeting will be held at the Camperdown botanic gardens at 1pm on Sunday for anyone interested in following this along. Further discussion about the farm can be found on The Standard‘s website. 

 

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National Energy Guarantee approved by Coalition party room

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The NEG (National Energy Guarantee) has been passed by the Coalition party room after a strenuous morning of debate – let’s take a look at what happens next. 

Next Steps For National Energy Guarantee

NEG - National Energy Guarantee
NEG – National Energy Guarantee (source: ABC News: Matt Roberts)

We wrote earlier this week about the NEG approval and how Prime Minister Malcolm Turnbull has a very hard road ahead if he’s to push this policy through parliament:

“The Labor Party has to decide whether they want to support cheaper and more reliability electricity,” Mr Turnbull said.

“We have got to bring an end to the years of ideology and idiocy which have been a curse on energy policy for too long and that is why industry – whether you’re talking about big industrial consumers or small business, consumer groups  – are calling on government, governments, and oppositions to get behind this policy.”

The four issues which we discussed earlier this week are still in a state of flux:

  1. The emission reduction targets can only ever increase and must not decrease.
  2. Targets need to be set in regulation (Energy Minister Josh Frydenberg has already rejected it).
  3. Emission reduction targets must be set every three years, three years in advance.
  4. Creation of a registry which is transparent and accessible by regulators and governments.

The opposition (federal Labor) are also in favour of the NEG but they want the 2030 emissions reduction target increased from 26% to 45%:

“We are still very keen on trying to find a bipartisan way through the deep energy crisis that has emerged under this Prime Minister,” shadow energy and climate change minister Mark Butler said.

“We will continue to fight for a much more ambitious investment setting for this sector so you do see new renewable energy jobs and investment and you do see downward pressure on power prices.”

According to former PM Tony Abbot, the NEG still needs a lot of work as most of its support is currently ‘conditional’ and at least a dozen members of the Coalition had expressed concern about the NEG. Abbot said that the provided explanations of how the NEG “might theoretically get prices down” sounded “like merchant bankers’ gobbledegook”:

‘We’ve got to be loyal to our electorates and to party members too and not show the unity of lemmings.’,” Mr Abbott continued.

The Australian Financial Review has the numbers at 26 MPs supporting the policy and around 10 yet to be convinced. 

For the next steps, the state ministers will be asked to support a month long public consultation on laws which will affect their constituents. The state legislation should then be finalised by the end of October and we’ll see what sort of shape (if any) the NEG is at that point. Federal legislation tied to the NEG will be introduced within the next 10 days. 

 

 

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