Australia was Neoen’s leading market in 2018 – a year in which the company recorded a 63% surge in revenues. The year was also market by the Paris-based renewable developer and Independent Power Produce (IPP) listing publically, and saw a significant expansion in its renewables fleet.
In 2018, Neoen added 391 MW in renewable generating capacity, including Australia’s largest solar project. The 189 MW Coleambally was completed in by Neoen in 2018, commencing full commercial operation in November. Construction of an additional 730 MW of renewable capacity was commenced by the company in 2018.
The share of merchant revenues, where electricity generated by Neoen projects is sold on wholesale markets, increased from 11.8% to 12.2% in 2018. Although Neoen notes that operating generation assets under a Power Purchase Agreement remains at the central to Neoen’s business model. The Coleambally project is a notable example of Neoen’s merchant projects, although Neoen notes merchant operation is largely “temporary”, as plants go into operation before PPAs have been signed.
The Hornsdale Power Reserve, often referred to as the ‘Tesla Big Battery’, in South Australia generated €18 million ($29 million) in revenues for Neoen in 2018. Of that, €15.2 million ($24.25 million) came in the form of “commercial revenues” and thus is counted towards overall merchant income. This includes the cash generated from the provision of grid services and arbitrage trading of power – buying at low wholesale prices and selling into the peaks. €2.7 million ($4.3 million) came from fixed revenue from AEMO for the provision of “contingency reserve”.
Neoen attributes the strong revenues, which were “ahead of expectations”, from the Hornsdale battery to its “technical characteristics (particularly its highly responsive approach)”. On the back of this, it is expanding its global utility scale storage fleet, including the 20 MW Bulgana battery array in Victoria.
“Not only is the revenue we are reporting today substantially higher than last year – we generated almost €90 million more in revenue over the past 12 months – it is also very robust,” said Neoen Chairman and CEO Xavier Barbaro in a statement. It expects to more than double earnings, on a EBITDA basis, to between €170 million to €175 million in 2019.