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Power Purchase Agreements

Eco Energy World’s Queensland Solar Farms

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Eco Energy World, the UK based solar company who in 2016 promised to bring 1GW of PV Solar to Australia, have gained approval for three new Queensland solar farms.

Eco Energy World Queensland Solar

In a statement provided Tuesday, Eco Energy (founded in 2012, but founder Svante Kumlin also started solar PV module manufacturing facility Eco Supplies in 1993)  said the new plants, as with previously approved projects, will feed directly into the grid via a ‘merchant’ model. This means EEW will not need to sign any Power Purchase Agreements and will instead be free to offer the energy on the spot market at wholesale prices (they’ll also be eligible for large-scale renewable energy certificates).

So far their plans include:

  • 280MW in Bouldercombe
  • 140MW in Maryborough
  • 20MW in Chinchilla

The Chairman of Eco Energy World, Svante Kumlin, is quoted on their website as saying  “The solar revolution has only just started. Today, solar represents only 1% of the global energy market. By 2030, it will be 10% meaning that an additional 1600 GW of solar power plants will be constructed during this time and the market will grow 10 times.” Kumlin is also active on Twitter as @SvanteKumlin if you’re interested in following him.

EEW have developed more than 200MW of renewable energy projects and currently have over 500MW under development. According to their site they plan to develop the 1GW in the ‘coming 3 years’. The site doesn’t state that they are specifically talking about Australia but we will update with further details as they are available – according to the timelines below it shouldn’t be long before we hear more about EEW’s plans for Qld Solar.

Eco Energy World Queensland Solar Farm
Eco Energy World Logo (source: eew.solar)

Kumlin advised RenewEconomy that the new projects will increase large scale solar power generation in Queensland by “approximately 410MW’ will will create “hundreds of jobs and services”.  Construction on the projects will commence this year in Q3 and are expected to be connected directly to the grid by the end of the year. This unpopular model (i.e. eschewing Power Purchase Agreements in favour of selling directly on the sport market) will be one that’s definitely watched closely by other solar farm developers – it allows a lot more control and potentially a lot more profit but lacks the stability of a long term agreement with a  major utility.

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Telstra Energy – Solar farm built with RES Australia

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Telstra Energy are backing a solar farm which will be built near Emerald in North Queensland at the cost of $100m. The telco have entered into a long term PPA (purchase power agreement) with RES Australia, who will operate the facility when it is built.

Telstra Energy & The Emerald Solar Farm

Telstra Energy
Telstra Energy

The single axis tracking farm will be built on 160 hectares and generate a huge 70MW of power – enough for 35,000 homes. The deal was announced yesterday – Telstra will buy the output (and the resulting renewable energy certificates (which act as a form of currency when validated)) from the farm, which will be completed in 2018. The Rnewable Energy Certificates (LGCs) are currently trading around $80/MWh and will help mitigate the cost of buying the solar power, given that wholesale electricity prices in QLD are around $100/HWh at the moment and, according to RenewEconomy, the cost of solar farms in QLD is around $70/MWh.

James Gerraty heads up strategy for the newly formed Telstra Energy division and told RenewEconomy that (the Emerald Solar Farm PPA) “…is about risk management. It makes a lot of sense for us.”. Meanwhile, Head of Telstra Energy Ben Burge (previously of Powershop Australia) gave the AFR some idea as to how they plan to use the power, saying “It’s a highly distributed, highly responsive source of energy which over the coming years we will look to make better use of in order to improve our resilience but also to address extreme wholesale prices in the market,”. No doubt they will use the backup power to sell when prices surge on the wholesale market and simultaneously protect themselves from larger fluctuations in energy pricing – a very astute risk management strategy. This will no doubt prove to be a sound investment and it will be interesting to see how far Telstra Energy take this new direction – they account for nearly 2TWh (2,000 gigwatt hours) of electricity per year so protecting themselves against rising energy costs whilst harnessing the falling cost of renewables is a no-brainer.

“We certainly will be looking at harnessing our own standby energy capacity in the wholesale market,” Mr Burge said, who said that, for example, he could see opportunities in the energy market for $300/MWh cap power contracts.

Watch this space for more news on Telstra Energy!

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