GREEN DEALS: Solar stunner

The story of a chief executive switch at True Value Solar is shrouded in mystery, AGL offers an update on the biggest wind farm in Australia and the Mt Mercer wind farm remains on the back burner.

True Value Solar

What’s happened at True Value Solar?

Australia’s largest solar retailer last week announced a new CEO. Nothing exciting in that per se, except it was rather sudden with no mention of why former CEO, Suren Chandrajit, left. What intrigued us most at Green Deals was the press release accompanying the news:

“True Value Solar, Australia’s largest retailer and installer of solar energy systems, announced today the appointment of Doug Roem as new CEO with immediate effect, following the resignation of the former CEO.

“Doug Roem is a seasoned executive with strong operational and industrial experience as well as proven leadership capabilities”, said Chairman, Dr Klaus Taraschka.

“True Value Solar has rapidly grown in Australia. I look forward to seeing this success continue with the help of Doug based on a project performance and quality that is best in class”, he said.

None of the usual fluff thanking the predecessor for ‘years of hard work and loyalty to the business that has set it up for years of sustainable growth etc etc’. Indeed, no mention of the former CEO’s name. Odd? We thought so.

A few calls and emails later and the best we have come up with is that well… True Value Solar has a new CEO.

AGL, Macarthur wind farm, Solar Flagships

AGL Energy released its full-year results on Wednesday, with the headline for news outlets across the country largely focusing on the company ‘taking a profit hit’ from its Loy Yang A purchase. Dig a little deeper and you realise that the hit it took, while considerable, was actually arguably good news for the company.

Much of the ‘hit’ was due to a $120.1 million writedown of the 32.54 per cent of Loy Yang A that it already owned. This revaluation was required in order to reflect the value AGL paid for the entire power station it didn't already own. In other words, in the previous year’s accounts it had either grossly overvalued its share of the asset or it paid ‘unders’. My money is on the latter, even after taking depreciation into account, given the financial stress of one of the sellers – Japan’s TEPCO, which is still battling in the wake of the Fukushima disaster.

A positive story was told in its renewable energy divisions, with news that the 420 MW Macarthur wind farm remains on track – as mentioned in Green Deals last month. The $1 billion wind farm, a joint venture between Meridian Energy and AGL, will be the largest in the southern hemisphere when fully operational in early 2013. First power from the site is expected in September 2012, Meridian said last week. As of July 31, 97 of the 140 3MW turbines had been installed. The project also remains on budget, with AGL expecting costs to be in line with its budgeted share of $492 million.

Another tidbit of information was offered on its Solar Flagships projects with regard to timing. Until now we have known construction would likely begin in mid-2014, with completion in 2015. Now it appears as if ‘2015’, will be the ‘tail-end of 2015’, with AGL outlining that both projects (Nyngan and Broken Hill) will be commissioned "by December 2015”. The company expects environmental approval for the projects early next year. The company also confirmed its massive Silverton wind farm in the area would likely begin construction in 2015 (the timing of the project has been discussed previously here).

Finally, the company announced an impairment charge of $14 million for its geothermal exploration programs which to-date have not been “supportive of commercial development.”

Meridian Energy, Mt Mercer wind farm

Speaking of Meridian, the NZ-based company’s oft-delayed Mt Mercer wind farm is still stuck in a state of flux.

Meridian took over ownership of the proposed 64-turbine 131 MW wind farm in Victoria in August 2009 and immediately shifted the timeline away from a late-2009 start to commencement in 2010, citing turbulent financial conditions. Then in an update report in 2010, the company said construction should begin in early 2011. Yet, as of today, construction has still not begun and Meridian told investors last week that it was currently “evaluating the potential to develop the Mt Mercer wind farm.”

Vestas

The world's largest wind turbine manufacturer has slashed more jobs ahead of what the company considers could be the "toughest year the wind industry has seen for many years" (dependant on an extension of the crucial wind production tax credit in the US). Vestas said it would cut a further 1,400 jobs on top of recent cuts, and could not guarantee there would be no further reductions in the near future.

"Vestas now expects the number of employees at year-end to be around 19,000 against the previous guidance of 20,400," the Danish firm told investors. "This will contribute to a fixed cost reduction of more than 250 million with full effect as from the end of 2012."

If you have any information for Green Deals please email daniel.palmer@climatespectator.com.au.

Twitter @Danielbpalmer.