Electricity network infrastructure owner Spark Infrastructure has announced it has received approvals from the Australian Energy Market Operator (AEMO) and TransGrid for full commercial operations at its 120 MWDC/100 MWAC Bomen Solar Farm, 10 kilometers north-east of Wagga Wagga, NSW. The project was successfully completed and connected to the grid despite challenges arising from the outbreak of Covid-19.
In a major shift towards owning renewable energy generation assets, Spark Infrastructure fully acquired the Bomen project from developer Renew Estate in April last year. Announcing the move a “logical and prudent first step” in delivering its Value Build strategy, the company said the investment strongly aligned with its existing risk and return profile producing attractive and accretive returns.
“On our first investment in renewable generation, we are very pleased to have delivered the Project under-budget especially when considering the significant challenges and delays experienced as a consequence of Covid-19,” Managing Director and Chief Executive Officer, Rick Francis, said. “This would not have been possible without the excellent performance of Beon Energy Solutions as EPC contractor [in which Spark Infrastructure has an ownership interest of 49%] and the invaluable work done by AEMO and TransGrid during the commissioning process.”
Construction was launched in June last year with the farm reaching mechanical completion in late January. Commissioning commenced in late February. On Monday, Spark Infrastructure said the Bomen project has been able to export 100% of generation since mid-June, with all inverters live and operational, after which there were no further restrictions applied to the farm’s output. The solar farm is currently generating in line with expectations, it added.
The Bomen Solar Farm features 310,576 bifacial PV panels supplied by Jinko Solar, inverters from SMA and trackers from NexTracker. It is expected to generate enough electricity to power 36,000 homes.
The project inked its first power purchase agreement (PPA) with commercial electricity retailer Flow Power. Under the deal that has a range of tenures across five, seven and 10 years, Flow Power contracted a portion of the farm’s output to power corporates, including munchies producer Snack Brands and winemaker Australian Vintage, and the City of Sydney, which is today running on 100% renewable electricity sourced from local solar and wind projects.
The project’s second PPA, which was announced on the same day as the project acquisition, was inked with Westpac, as part of its commitment to a 100% renewables target. The deal is forecast to put the bank on track to reach 45% of renewable energy use by 2021 and move towards its ultimate target to source 100% of its energy from renewable sources by 2025. In aggregate, Westpac and Flow Power will purchase 95% of the farm’s output over the first five years.
Total costs are expected to be approximately $180 million compared to an estimated cost of $188 million at financial close, Spark Infrastructure said on Monday. The project, which was funded through a combination of cash, corporate debt, and equity, is expected to generate “attractive risk-adjusted returns” under its PPAs and cash in annual revenues of approximately $13.5 million on average for the first five years.
“The Bomen Solar Farm project demonstrates our capability and commitment to a low carbon energy future whether that be through building and owning renewable generation, or by building out electricity transmission networks to bring more renewable generation to market,” Francis said. “We are confident in our Value Build Strategy and believe our ongoing investment in renewables will create an attractive diversified asset portfolio that delivers value for our Securityholders.”
The Bomen Solar Farm is also delivering for the community and has supported many local jobs and businesses during construction. In partnership with Westpac, Spark Infrastructure has established a community fund to invest $1 million over ten years to support youth education and biodiversity.
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