15MWac UTILITY SCALE SOLAR FARM
Municipal Association of Victoria
12th July 2016
THE PROJECT
• Sunshine Coast Council 100% Financing a 15MWac PV build
– Located within SCC boundary
– Grid connected
– Initially provide 30GWh power annually
•
•
•
•
Exhaustive 4 year process
Reached Financial Close
EOI/Tender process for D&C and O&M
Construction is underway
THE PLAN
THE DRIVERS
• Renewable Policy
–
–
–
–
Climate Change & Peak Oil Strategy 2010-2020
Energy Transition Plan 2010-2020
Rural Futures Strategy
Regional Economic Development Strategy 2013-2033
• Is Policy at all Cost?
• ‘Traditional’ Renewable Project delivery not financially viable
– PPAs, commercial providers, Green Power etc
• Renewables Policy created an ‘Investment Problem’
FRAMING THE BACKDROP
Electricity Cost
Category
Energy Usage
Carbon Charges
Electricity Network Charges
Streetlight Service & Maintenance
Other Charges
Total
30 year
Net Present Cost
Forecast
($millions)
$(78.7) m
$(132.8) m
$(98.5) m
$(9.4) m
$(319.2) m
FRAMING THE BACKDROP
Electricity Cost
Category
Energy Usage
Carbon Charges
Electricity Network Charges
Streetlight Service & Maintenance
Other Charges
Total
30 year
Net Present Cost
Forecast
($millions)
$(78.7) m
$(132.8) m
$(98.5) m
$(9.4) m
$(319.2) m
Can enough
be saved on
energy usage
to justify
Investment?
THE ALTERNATIVE
Electricity Cost
Category
30 year
Business as
Usual
30 year
Solar Farm
($millions)
Saving /
(Cost)
Energy Charges
($78.7)m
($35.4)m
$43.3m
Total Energy Usage Cost
($78.7)m
($35.4)m
$43.3m
Capital and financing costs
-
($50.4)m
($50.4)m
Operating cost
-
($10.6)m
($10.6)m
Large scale generation certificate income
-
$22.6m
$22.6m
Electricity Export
-
$12.8m
$12.8m
Solar farm terminal Value
-
$4.4m
$4.4m
($78.7)m
($56.6)m
$22.1m
Total costs
THE ALTERNATIVE
Electricity Cost
Category
30 year
Business as
Usual
30 year
Solar Farm
($millions)
Saving /
(Cost)
Energy Charges
($78.7)m
($35.4)m
$43.3m
Total Energy Usage Cost
($78.7)m
($35.4)m
$43.3m
Capital and financing costs
-
($50.4)m
($50.4)m
Operating cost
-
($10.6)m
($10.6)m
Large scale generation certificate income
-
$22.6m
$22.6m
Electricity Export
-
$12.8m
$12.8m
Solar farm terminal Value
-
$4.4m
$4.4m
($78.7)m
($56.6)m
$22.1m
Total costs
THE ALTERNATIVE
Electricity Cost
Category
30 year
Business as
Usual
30 year
Solar Farm
($millions)
Saving /
(Cost)
Energy Charges
($78.7)m
($35.4)m
$43.3m
Total Energy Usage Cost
($78.7)m
($35.4)m
$43.3m
Capital and financing costs
-
($50.4)m
($50.4)m
Operating cost
-
($10.6)m
($10.6)m
Large scale generation certificate income
-
$22.6m
$22.6m
Electricity Export
-
$12.8m
$12.8m
Solar farm terminal Value
-
$4.4m
$4.4m
($78.7)m
($56.6)m
$22.1m
Total costs
LGAs – THE IDEAL RENWABLE INVESTOR
• Council is its own customer
– Removes margin and credit risk making it cheaper
• Not a selective use of capital
– One way or another electricity usage is going to cost ~$80million
•
•
•
•
Low financing costs
Council is not looking for excess returns
Longer-term view
Economic and Social benefits
– No value to a commercial player
THE CHALLENGES
• Community concerns
– Visual Amenity
– Property Value Impact
– “How can Council do this if a commercial player cannot’
• Site location is a critical constraint
– Grid connection is key & cheap land comes with it’s own issues
• Grant Funding
• General scepticism
• Managing the internal decision process
THE BENEFITS
• Exceeding Community endorsed Policy aims (with Savings!)
• SCC - 100% green power (~30GWh annually)
• Reinforcing Sustainable Regional Credentials
– Drives local investment and growth
• Leverage natural Social & Environmental benefits
– Budget for a learning/R&D centre with Education programs, school visits
• Near term/follow on Economic investment
– Cleantech sector investment encouraged
• Strengthen Academic ties
CONTACT
Gary Kelly
Director – Resource Analytics
Mobile: 0429 441 834
Email: [email protected]