Infigen, Suntech Scale Back Plan for Solar Farm in Australia
Stock Chart for Infigen Energy (IFN)
Infigen Energy (IFN) and Suntech Power Holdings Co. (STP) cut the size of a solar plant proposed for Australia’s New South Wales state to about a quarter of the original plan as they vie for federal funds.
The Australian company and China’s Suntech want to develop a 35-megawatt solar project after failing in an attempt to get a government grant for a 150-megawatt plan, Miles George, managing director of Sydney-based Infigen, said in a phone interview yesterday. The solar plant would be located next to Infigen’s 140.7-megawatt Capital Wind Farm, George said.
“It’s significantly smaller, but nevertheless a reasonable-scale project by world standards,” he said, declining to provide a cost estimate for the plant.
The Infigen and Suntech venture was referred to the Australian Renewable Energy Agency by Resources Minister Martin Ferguson in June after losing a bid for funds in the government’s Solar Flagships program. The government agency is in talks with Infigen and Pacific Hydro Pty. about funding projects as the country moves toward a target of getting 20 percent of its power from renewable energy by 2020.
While the government in June awarded A$129.7 million to AGL Energy Ltd. (AGK) and First Solar Inc. (FSLR) to build a 159-megawatt solar project in New South Wales, it scrapped a plan to provide A$464 million to an Areva SA (AREVA) venture after the Queensland government pulled funding for the 250-megawatt project.
The renewable energy agency, set up last year to help the industry expand, is targeting smaller, “sensible-scale” solar- power projects, George said in an e-mail.
The government previously set the 150-megawatt requirement for solar plants seeking grants, said George, whose company has interests in 24 wind farms in Australia and the U.S.
A program in Australian Capital Territory to develop as much as 40 megawatts of solar power is a model, the renewable agency’s chief executive officer, Ivor Frischknecht, said in a Nov. 12 phone interview “Smaller, not quite as ambitious, very clear in terms of what’s intended,” he said.
Infigen has slumped 7.4 percent this year in Sydney trading following a 50 percent drop in 2011 as low prices of renewable energy certificates discourage investment in new wind farms. Electricity retailers are required to purchase the certificates from developers of wind and solar plants as part of the government’s policy to expand the industry.
Infigen shares climbed 14 percent today to 25 cents, the biggest gain in 13 months, compared with a 0.3 percent decline in Australia’s benchmark S&P/ASX 200 Index.
The government last year revised its renewable energy program after an increase in household solar installations led to a glut of the certificates that pushed down prices.
Infigen expects prices will rise next year, allowing some of the company’s 1,300 megawatts of potential projects to go ahead, according to George. Infigen’s plans include the Bodangora, Capital 2 and Flyers Creek wind farms in Australia.
The price of Australia’s renewable energy certificates is forecast to rise toward A$50 ($52) by the end of the decade from about A$36 currently, Kobad Bhavnagri, a Sydney-based analyst at Bloomberg New Energy Finance, said yesterday.
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