Neoen will soon break ground on its Numurkah solar farm in regional Victoria after reaching financial close this week.
Construction of the 100MW project will begin this week with the first panels to be installed in October, and commercial operations slated to begin in May 2019.
“Numurkah is an important project for Neoen, firstly because it marks the achievement of our first GW of projects in Australia, either under construction or in operation,” Neoen Australia managing director Frank Woitiez said.
“Secondly, because the Victorian Government and Zen Energy are long-term partners for Neoen and this project proves that collectively, we are moving towards our aim of delivering sustainable, reliable and competitive energy to all Australians.”
The Clean Energy Finance Corporation (CEFC) has committed $56 million in debt finance to accelerate development of the $198 million solar farm.
Neoen has secured major power supply contracts for both the Laverton steelworks, in Melbourne’s west, and the Melbourne tram network.
CEFC CEO Ian Learmonth said the Numurkah solar farm contract with Laverton steelworks is an outstanding example of how clean energy can be integrated into manufacturing operations to help decarbonise their production processes and reduce costs with locked-in solar contracts.
“High grid electricity prices, high gas prices and unfavourable contracting conditions have put pressure on tight operating margins for manufacturers,” Mr Learmonth said.
“The lower cost of solar, combined with these types of commercial power purchase agreements, offer manufacturers welcome control over their energy use.
“Reducing the electricity bills and carbon emissions of energy-intensive industries such as steel manufacturing is increasingly achievable.
“For passengers on Melbourne’s iconic tram network, the benefits are also clear. Trams get cars off the road, which is crucial for lowering emissions.
“Supporting the operation of the tram network with solar energy is a further opportunity to reduce emissions in the transport sector.”
The project will generate about 255,000MWh of electricity into the national power grid each year, which is enough to power about 42,000 homes.
Downer EDI has been awarded the engineering, procurement and construction (EPC) contract for the power plant.
Neoen has contracted 60 per cent of the farm’s projected output to renewable energy retailer SIMEC ZEN Energy, a majority owned subsidiary of the GFG Alliance, which operates the Laverton steelworks.
SIMEC ZEN Energy will use the energy to support firm retail supply contracts to commercial and industrial customers in Victoria, including the Laverton steelworks.
The Victorian Government has contracted a further 30 per cent of Numurkah’s large-scale generation certificates to support its goal of covering the electricity load of Melbourne’s tram network with solar power.