Origin Energy says it has agreed to sell its biggest solar farm project, the as yet unbuilt 110MW Darling Downs Solar Farm in Queensland, but will agree to take its output as part of its efforts to meet its share of the renewable energy target.
The $220 million sale of Darling Downs, to be located next door to its 644MW gas-fired generator of the same name outside Dalby, will be made to APA Group, while Origin signs a 12-year power purchase agreement for the output. The sale includes an option over the nearby Beelbee solar project, with potentially another 150MW of solar capacity.
The transaction continues Origin’s strategy of selling its major renewable energy projects – it is also looking to sell the 500MW Stockyard Hill wind farm in Victoria, and also makes it the large off-taker of solar farm in the country, with more than 650MW under contract.
Origin recently signed up for the 220MW Bungala solar farm to be built near Port Augusta in South Australia by Reach Solar, the company of former Hazelwood boss Tony Concannon, and has signed deals for the 57MW Moree solar farm in NSW, the 100MW Clare solar farm in Queensland, and the Lakeland solar and storage project, also in Queensland.
An Origin spokesperson said a further 200MW had been contracted, but not yet announced.
The $220 million Darling Downs project was the biggest project to win funding in the recent large scale solar tender conducted by the Australian Renewable Energy Agency (ARENA) and was awarded $20 million in support. This funding will be provided to APA as the new project owner.
Origin CEO Frank Calabria said that in a little over 12 months, Origin had added more than 650MW of solar to its power portfolio – the equivalent of installing solar panels on more than 400 Australian homes every day for an entire year.
“We’re well on our way towards achieving our objective of building or contracting up to 1,500 MW of new large scale renewable generation by 2020,” he said.
“This will see Origin almost entirely replace the capacity of what was one of Australia’s largest carbon emitters, the recently retired Hazelwood power station, with 100 per cent renewable energy.”
As part of the renewable energy target, retailers must produce or contract their share of the 33,000GWh that must be sourced from renewable energy by 2020.
“At a time when energy markets are in transition, Origin is taking decisive action to ensure a secure, reliable and affordable energy supply,” Calabria said.
“We are both increasing the total energy we supply to meet the needs of customers, and growing the share of renewables in our energy mix as the cost of renewable technologies continues to fall.”
APA said in a separate statement that the project would be completed by late 2018. APA also won ARENA funding for the $20 million Emu Downs solar farm near Cervantes.
“As Australia’s leading energy infrastructure business, we see investing in renewable energy as key to supporting Australia’s transition to a lower carbon economy,” managing director Mick McCormack said in a statement.
Meanwhile, Origin said it had appointed Teresa Engelhard, a former venture capitalist and senior executive in the energy, information, and technology sectors, to its board.
In a statement, the company said Engelhard had recentlyfocused on emerging technology in the energy sector as a venture investor and board member. Her past directorships include Daintree Networks and Zen Ecosystems, and she is also a non-executive director of RedBubble, Planet Innovation, StartupAUS, and Redkite.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.