22 July 2014
The Clean Energy Finance Corporation (CEFC) is providing $13 million to finance a major expansion of Epuron's Northern Territory Uterne solar power station located in Alice Springs.
CEFC CEO Oliver Yates said Australia has a natural competitive advantage in solar energy with some of the best solar resources in the world, especially in a place like the Northern Territory.
"There is untapped potential for large-scale solar in regional and remote Australia," Mr Yates said. "Solar power can make a big difference in keeping our energy costs down and helping us to compete globally. The CEFC is very pleased to support this project to supply the Northern Territory with clean power that is cost-effective today and even more so in the years to come."
The CEFC's loan will allow construction of Epuron's Uterne 2, a 3.1 MW expansion of its adjoining Uterne 1 which is a 1.0 MW solar PV power plant in Alice Springs that provides power into the local grid.
Uterne 2, like Uterne 1, will use solar-tracking technology that increases daily energy production by up to 30 per cent compared with conventional fixed-tilt installations. It is one of the largest tracking solar power plants in the Southern Hemisphere.
The existing grid and off-grid electricity sources in the Northern Territory are relatively expensive and more emissions intensive, so that using the readily available solar-generated power makes sense both from a financial and environmental perspective.
Epuron Executive Director and Co-Founder Andrew Durran said expanding its existing Uterne facility to take advantage of both the abundant solar energy in the Northern Territory and their existing infrastructure makes good business sense.
"The CEFC's finance has been critical for this expansion as the project was too small to appeal to the commercial project finance market. By quadrupling the capacity of our Uterne plant, Alice Springs can reduce its dependence on gas and diesel-fired generation and use a clean, renewable power source," he said.
The CEFC will provide Epuron a structured project finance facility demonstrating the potential for this type of finance to be used in other similar, smaller-scale projects.
"The CEFC's project financing model helps drive down transaction costs for smaller projects, helping to make them attractive to commercial project financing institutions. The potential for the future is in building pooled portfolios of smaller transactions which will be able to attract private sector interest," Mr Yates added.
The CEFC is currently finalising a number of solar investments which, along with its finance for Epuron, will take its total commitments to solar investments to nearly $250 million in utility, residential and commercial solar in Australia. Market demand for solar financing continues to be strong and the CEFC has a further $1.6 billion in potential projects seeking solar finance in its pipeline.
Epuron is a leading, privately-owned Australian renewable energy company with a focus on development, ownership and operation of utility-scale renewable energy projects. In solar energy, Epuron's focus is megawatt-scale power generation in both grid-connected and off-grid markets. Epuron is also one of Australia's most successful wind farm developers.
The construction of Uterne 2 will increase Epuron's total solar portfolio capacity to 5 megawatts. In addition to Uterne, Epuron owns and operates three off-grid solar projects located at Ti Tree, Kalkarindji and Alpurrurulam in the Northern Territory. These projects all displace diesel usage in these remote communities.