Major power retailer Origin Energy has formalised an off-take agreement with the Bungala solar plant in South Australia as it looks to boost capacity in the state.
The energy producer and retailer in February signed a conditional power purchase agreement with Reach Solar to buy electricity from the project.
It has now reaffirmed its agreement to buy the entire 220 megawatts (MW) generated from the solar plant, after the project achieved financial closure.
AAP Newsagency reports the solar farm 10 kilometres north east of Port Augusta, is being developed by Tony Concannon, the former head of GDF Suez Australia, which operated the recently closed Hazelwood coal fired power plant in Victoria.
The deal is Origin’s largest solar power off-take agreement and takes to 550MW the new renewable energy capacity it has contracted over the past year.
“By putting in place a long-term contract to purchase all of the solar power Bungala produces, we have played an important role in helping it reach financial close,” Origin chief executive Frank Calabria said.
Bungala’s development will mean more jobs in Port Augusta and will also contribute to improved energy security in South Australia, as solar is a more predictable form of renewable energy than wind, Mr Calabria said.
AAP reports the company has set a target of signing up new renewable energy capacity of up to 1500MW by 2020, to almost entirely replace the recently retired Hazelwood plant’s capacity.
Hazelwood, considered Australia’s most polluting power plant, was shut down last month after 52 years, as operator Engie said it was uneconomical to operate.
The loss of capacity has, in part, led to power outages and soaring electricity prices in South Australia, which relies on renewable energy for more than a third of its total power needs.
A blackout in September 2016 has been estimated to cost the state about $450 million.
Origin signed two separate agreements in March with Engie to buy power from the gas-based Pelican Point power station in Adelaide for three years, allowing the plant to return to full capacity.
The energy retailer has simultaneously targeted renewable energy capacity, with the sector’s contribution expected to jump from 12 per cent now to 30 per cent of its total energy mix by 2020.
Origin expects to start receiving power from the first 110MW stage of the Bungala solar farm by December, while the entire 220MW is expected to be operational by August 2018.
