$300m plan for five solar energy farms, providing 1pc of country's supply
A new company has unveiled plans to build five solar energy farms in the upper North Island at a cost of $300 million, which will together be capable of providing about 1 per cent of the country’s electricity supply.
Lodestone Energy has secured sites near Dargaville, Kaitaia, Whakatane, Edgecumbe and Whitianga for the solar farms which it describes as “a massive turning point for the country’s energy production”.
Energy Minister Megan Woods said she was “hugely excited by the new, independent entrant to the renewable energy market”, which she forecast would bring about cheaper power bills as well as reduced reliance on fossil fuels.
Meridian Energy chief executive Neal Barclay told a select committee in February that it expected to invest in grid-connected solar farms but indicated its first farm might not come online for five years.
Construction of Lodestone’s first solar farm – a 62 gigawatt-hour farm in Kaitaia – is due to begin later this year and should be complete by the summer of 2022, with all the farms scheduled to be in operation by the end of 2023.
Once complete they should have an annual output of about 400GWh, which would be enough to power all 55,000 homes in Hamilton or about 150,000 electric cars.
A computer rendition of one of Lodestone’s solar farms.
The solar farms will cover 500 hectares and will comprise 500,000 solar panels which will be erected at a height of about 2.3 metres, in lines about 10 metres apart, allowing livestock to graze underneath and tractors to move in between.
Lodestone is headed by Gary Holden, the former chief executive of independent retailer Pulse Energy.
It has so far received about $45m in funding from investors including ‘‘rich lister’’ Gary Haddleton, an early investor in Xero, and Sir Stephen Tindall’s K1W1 venture capital fund.
Holden said that tranche of funding had allowed Lodestone to firm up its engineering plans and secure sites for the solar farms, which are all on private farmland.
Further tranches would be released as it required cash for construction, he said.
Most investment in renewable energy in New Zealand in the near term is expected to be in wind farms, which can produce power unsubsidised at a price of about 7 or 8 cents per kilowatt-hour.
But Holden said Lodestone could produce solar power at a similar price to wind energy, with the advantage that solar power was produced during the day when electricity prices were higher.
“We think they are pretty much on par now and then we have the advantage of getting more revenue per unit.”
Energy Minister Megan Woods forecasts Lodestone’s entry into the power market will help bring down prices as well as carbon emissions.
He was not surprised large generators had not been as quick to the market.
“They are always concerned about balancing their portfolios and making sure they have a match of retail customers with their generation.
“So they tend not to get too far out of step and many of them have been spending years developing wind and geothermal, so it was time for a new entrant to bring solar to the market.”
The company could supply power direct to consumers, perhaps through retail partners, as well as selling it on the wholesale market, Holden said.
“We definitely feel this kind of electricity should be sold retail and we are working with electricity partners to do that.”
Lodestone has an agreement to source modern panels that will move automatically to track the sun and are double-sided, so they can also generate power from light reflected from the ground.
About 80 to 90 per cent of the land covered by Lodestone’s solar farms could still be used for agriculture.
The company has not identified the exact locations for the solar farms but said they worked best on flat land that had lots of sun and that was near existing substations.
The solar farms do not require any people to be permanently on site.
Lodestone would be making a lot of money from high wholesale market prices if its plans had commenced earlier and it was now in operation, Holden said.
“I wish we had built two years ago – put it that way.”
A spokeswoman for Woods said she had now received advice from officials on the wholesale market that she called for last month in the wake of soaring spot market prices for power, which she was now considering.
Rio Tinto said on Tuesday that the Tiwai Point aluminium smelter was cutting production further to take another 6MW off its power demand, bringing that down to 549MW, following an 11MW cut last week.
Fears of winter power shortages eased slightly this week thanks to wet weather but spot market prices were still sitting above 20c/kWh on Tuesday afternoon.
Author: Tom Pullar-Strecker