GREEN DEALS: Solar sizzle

As FRV gets ready to construct Australia's largest solar plant, rumours are bubbling that the world's largest PV manufacturer, Suntech, could receive a takeover offer... soon. Meanwhile, there's strange goings on at Hanwha, a (pale) silver lining in contracts for closure and progress on the Taralga wind farm.

FRV, ACT solar auction

The first ACT solar auction is complete, with the winning bid coming from Spanish-based Fotowatio Renewables Ventures (FRV). The reverse feed-in tariff auction saw FRV edge out nine other proposals from five companies, with its proposal for a 20 MW solar PV facility in Royalla (23 km south of Canberra’s CBD).

FRV will begin construction next year on the 83,000 panel project and it is slated for completion in 2014, which will make it Australia’s largest solar farm until AGL’s Solar Flagships project is commissioned in 2015.

The equipment suppliers were not disclosed. FRV has most recently had links to Trina Solar, but whether Trina will be tapped for this project remains to be seen.

“This reverse auction process has delivered a solar facility that will produce enough renewable electricity to power approximately 4,400 Canberra homes at a cost of 25 cents per week per household or $13 per year,” ACT Minister for the Environment and Sustainable Development, Simon Corbell, said.

“Importantly, we expect this already low cost to reduce further as the wholesale price of electricity rises, and for the cost per household to reduce to approximately $9.50 per year by 2020.”

Country manager of FRV Australia, Andrea Fontana, said the project – has a feed-in tariff rate of $186 per megawatt-hour (18.6c/kilowatt-hour) – was an important step for the company in Australia.

“The tendered feed-in tariff is flat, not CPI adjusted, and has a duration of 20 years. We believe that this program will make a strong contribution to accelerating Australia’s transition to a lower carbon emitting economy.”

FRV’s first foray into Australia, the Moree Solar Farm, is in a state of flux after initially winning a tender as part of the Solar Flagships program. A revised plan will see it look to attract funding from ARENA.

Altogether the large-scale solar auction process will see 40 MW of large-scale PV developments committed to by the ACT government by the middle of next year. Final proposals for the next 20 MW development are due from shortlisted parties in March next year.

Suntech, GCL Poly

There are rumours a takeover of troubled solar heavyweight Suntech could soon be made by GCL Poly, one of the world’s largest polysilicon and wafer manufacturers. According to Solar Business Services, industry insiders believe a deal could be “imminent”.

The news comes a few weeks after reports surfaced that GCL Poly had been tapped by the Chinese government as a potential white knight for debt-ridden, fraud-hit Suntech. According to Solar PV Investor, a senior manager at GCL Group said: “The government negotiated with them (GCL Poly) about becoming a shareholder of Suntech. But considering the present depressed situation of (the) PV industry, the company had no plan to get involved into production of cells, we declined this suggestion.”

There is no doubt that GCL Poly, an upstream solar leader, would be a good fit with Suntech, a downstream leader, but the big question is one of funding. On first glance at GCL’s financials there is little reason to suggest it could go after Suntech given the debts it would be required to take on. However, there is more to the story than meets the eye.

GCL Poly’s second largest shareholder is China Investment Corp, with around 20 per cent of the company (its largest shareholder is its founder, Zhu Gongshan). CIC is a Chinese sovereign wealth fund with assets of around $480 billion. In other words, if the Chinese government is seeking a company in the struggling sector to help Suntech out of its mess, GCL Poly, with its ties to a Chinese sovereign wealth fund, would not be a bad option.

Investors have yet to cotton onto the rumours, with Suntech's share price continuing to plumb record lows this week.

Comment has been sought from both parties.

Contracts for Closure

A key plank of the government’s clean energy future plans has fallen apart, with a deal to close 2000 MW of Australia’s dirtiest power not forthcoming.

There is one (very faint) silver lining however: that it could boost plans for solar thermal at Alinta’s coal-fired power plants in South Australia (Playford and Northern).

"Alinta Energy respects the federal government's decision to not proceed with the contract for closure program; clearly the views on commercial asset value were out of alignment," the company said in a statement on Wednesday.

"In light of today's announcement, Alinta Energy is considering the implications for the Flinders assets in SA and the potential for investment in solar thermal power."

The solar thermal plan for Alinta has been simmering for some time and has significant community support in Port Augusta. But while Alinta has indicated a keenness for a solar thermal pilot plant development it does not see it as commercially viable. As such it is looking for state and federal funding to back the such a development, with the most likely candidate for federal funds being the newly created ARENA.

CBD Energy

CBD has negotiated a power purchase agreement with TRUenergy for its $250 million Taralga wind energy project.

CBD also brought in Spain's Banco Santander as equity partner in developing the 51-turbine, 106.8MW project.

Banco Santander signed an exclusivity agreement to have 90 per cent equity in Taralga with CBD retaining the other 10 per cent. It remains subject to final due diligence, however.

Hanwha Solar One

Fresh from its parent’s acquisition of Q-Cells, Hanwha Solar One has delayed the release of its final results. In a peculiar move the company said on August 30 that it would release its results on September 4. Then on September 3 it said that “due to an unavoidable scheduling conflict”, it had to reschedule the results to September 11.

While it could have to do with Hanwha Group signing takeover documents with Q-Cells, or something relatively minor, it is curious that such a switch was made at such late notice. The company did make the point of saying its results would be in line with forecasts so no nasty surprises are expected on that front, but whether there’s any exciting developments it remains to be seen.

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