RCR Tomlinson Solar Farm Writedowns

Australian solar contracting company RCR Tomlinson has taken a $57m write down on the Daydream solar farm and the Hayman solar farm, which are owned by Edify Energy and to be installed in North Queensland.

RCR Tomlinson Solar Farm Writedown

We reported earlieir this year on the Hayman and Daydream solar farms and how First Solar will be handling the installation for Edify – at that time everything looked rosy but it appears that a couple of major factors have led to cost and time delays. Edify have cited “external” delays, bad weather, and local issues like poor ground quality.  Also being blamed are the increasingly stricter requirements being imposed by the Australian Energy Market Operator which are affecting solar farms Australia-wide. 

RCR Tomlinison Daydream solar farm in Collinsville, Queensland.
RCR Tomlinson -Daydream solar farm in Collinsville, Queensland. (source: thewest.com.au)

As of last year, RCR have over half a Gigawatt of large-scale solar projects in their order book and over a Gigawatt currently being developed or progressed under early contractor involvement processes, according RCR Managing Director & CEO, Dr Paul Dalgleish (who has since left RCR). As a result of the writedown RCR are now attempting to raise $100m from investors and have had to offer a significant discount on RCR shares on a one-for-1.65 basis at $1 each. This represents a ~65% discount on the stock’s last trade price ($2.80).

According to RenewEconomy, Tomlinson has written down $57 million on the $315 million contract values for both the 150MW Daydream and the 50MW Hayman solar farms owned by Edify Energy. They’re both located in North Queensland and both nearing completion.

A statement to shareholders noted that: 

“These project-specific issues required the Company to continuously revise its execution methodologies to mitigate delays, leading to increases in subcontractor costs (both people and plant) and logistics cost overruns.

“As a result of these cost overruns that arose over the life of the Project, RCR has realised cumulative write- downs of $57 million from the tendered margin on the Project.”

Some bad news for solar farms in Australia but we have no doubt that these projects will end up completed and can start making their investments back. We’ll be watching closely how the AEMO’s ongoing changes to legislation affects the many other solar farms currently in various stages of completion/operation. 

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Tesla Battery Power in Victoria – Powerpack

Tesla Battery Power in Victoria will be installed in regional Victoria this year, in time for the 2018/19 summer. The Turnbull government has committed up to $25m to Victoria’s first foray into large-scale, grid-connected batteries.

Tesla Battery Power in Victoria

Tesla Battery Power in Victoria - Tesla Powerpack
Tesla Battery Power in Victoria – Tesla Powerpack (source: tesla.com)

The Age is reporting that ARENA (the Australian Renewable Energy Agency) and the Turnbull government will contribute $25m to the $50m project, which will be located in Western Victoria. The area has been identified as having a ‘vulnerable’ energy transmission network and will benefit immensely from the project. The other $25m of funding will come from a consoria led by Spotless Sustainability Services, according to PV Tech.

The batteries will, similar to the South Australia Tesla battery plant, use Tesla’s lithium ion Powerpacks, but in slightly different configurations and with separate manufacturers. 

There will be two separate batteries – 

  1. A 25MW/50MWh Powerpack solar battery in Kerrang, supplied by Tesla, owned by Edify Energy and Wirsol, and connected to the Gannawarra solar farm in north-west Victoria.
  2. A 30MW/30MWh grid-connected Powerpack in Ballarat, supplied by global energy storage giant Fluence (a conglomeration of Siemens and AES), owned by AusNet and and built at a nearby station in Warrenheip. 

Both batteries will be operated by EnergyAustralia and a PPA (power purchase agreement) has already been signed. 

“ARENA is excited to be demonstrating the capabilities that these new batteries will provide in securing reliable electricity for western Victoria and to facilitate the Victoria’s transition to renewable energy,” ARENA’s Ivor Frischknecht said in a statement.

Victoria has a RET (renewable energy target) of 25% by 2020 and 40% by 2025. 

Minister Josh Frydenberg said: “Storage has been the missing piece of the energy jigsaw for a long time. Whether it’s Snowy 2.0 in New South Wales and Victoria, the Battery of the Nation projects in Tasmania or various initiatives, including a 30MW battery, in South Australia, we are expanding, exploring and funding energy storage right across the country.”

Back in January we wrote about the Bulgana Green Power Hub – a 194MW wind farm and a 20MW / 35MWh battery storage facility which will be built by French renewable energy developer Neoen separately to the Gannawarra solar farm Tesla battery or the Ballarat terminal station Powerpack. So there’s plenty on the horizon for energy storage in Victoria – it’ll be great to see how this affects some of the weaker parts of regional Victoria as it’s already had a fantastic effect in South Australia. 

 

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Hayman and Daydream Solar Farm built by First Solar

First Solar have won a module supply contract for Edify Energy‘s Daydream solar farm and Hayman solar farm in Queensland. RCR Tomlinson Ltd (ASX: RCR) was awarded the $315m contract for the farms and have decided to give the supply contract to First Solar, who now have over 500MW in the pipeline over the next 12 months. For their part, RCR have over half a Gigawatt of large-scale solar projects in their order book and over a Gigawatt currently being developed or progressed under early contractor involvement processes, according RCR Managing Director & CEO, Dr Paul Dalgleish talking to RenewEconomy.

Daydream Solar Farm and Hayman Solar Farm

First Solar - Daydream Solar Farm
First Solar – Daydream Solar Farm (source: firstsolar.com)

The Daydream solar farm will be 180.7MW and the Hayman Solar Farm will be 60.2MW – the two projects are located just north of Collinsville in North Queensland – in the Whitsunday region. According to ELP.com, they will use single axis tracking technology which has been commissioned from Array Technologies, and over 2 million advanced thin film PV modules from First Solar, to produce around 531,000 MWh of renewable energy every year.

Edify signed a power purchase agreement with Origin Energy for the Daydream solar farm’s output (they’ll also buy the renewable energy certificates), but the Hayman Solar Farm will operate as a merchant plant.

About First Solar and Edify Energy

First Solar, Inc. are an American based PV manufacturer of rigid film modules, or solar panels, and also a provider of utility-scale PV power plants. In 2009 they were the first solar panel manufacturer to lower their creation cost to $1 (USD) per watt. According to Wikipedia they produced CdTe-panels (cadmium telluride) with an efficiency of ~14% at a cost of 0.59 USD / watt in 2013. They’re the second largest maker of PV modules worldwide.

Edify Energy are an Australian renewable energy development and investment company who have led the financing and delivery of over 30 utility scale solar PV projects at a cost of over $1b. For the Daydream solar farm and Hayman solar farm, they won ARENA (Australian Renewable Energy Agency) funding last September under their large-scale solar funding round.

More good news for Queensland solar farms – construction on the projects will commence almost immediately – scheduled for Q3 2017, with module delivery to arrive in Q4 2017 and Q1 2018.

 

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