GFG Alliance will look at selling its Cultana solar and Playford battery projects in South Australia
GFG Alliance, which has just announced a refinancing deal for its Australian operations, will test the market for interest in its Cultana solar and Playford battery projects.
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GFG Alliance will look to sell or form a partnership over its stalled Cultana solar project just outside Whyalla and its Playford battery project, which is yet to break ground.
A day after the beleaguered company announced it had struck a deal to refinance the $430m in debt it owed failed supply chain lender Greensill, GFG said it had appointed EY to explore potential sale of partnership options.
GFG says it intends to retain the right to priority access to energy generated from the projects to power its Whyalla operations, however the sale process indicates that executive chairman Sanjeev Gupta’s grand hopes for a vast renewable energy asset base in South Australia are shelved for now.
The Cultana project is designed to include 780,000 solar panels located just outside Whyalla, however so far just a small test rig has been installed.
The solar farm would generate up to 280MW of power once installed, enough to power about 100,000 average SA homes.
GFG’s Simec Energy subsidiary said the Cultana project was at “shovel-ready status with relevant approvals and licenses in place’’.
The 100MW Playford Battery Project, which was supposed to be of a scale to rival the Tesla battery installed at Jamestown in 2017 as a response to the statewide power blackout, is still in the early stages with GFG saying “planning is well advanced” and a site near Port Augusta had been secured for its construction.
Mr Gupta’s renewable energy plans were gargantuan in size, expanding from an initial ambition of 1GW, to a 10GW aspiration announced at an energy conference in 2018.
For context, at the time NSW was using about 8.5GW of power and SA 1.65GW.
Mr Gupta detailed plans for power to be generated by vast solar arrays, then stored in disused mines as part of “pumped hydro” energy projects, which involve using water and gravity to produce energy when it is needed.
GFG also said at the time it wanted to put solar on 200 of its own industrial sites across Australia, and was looking to do deals with its employees to give them access to solar and battery storage systems for their houses.
The renewable energy ambitions were integral to Mr Gupta’s GREENSTEEL plans, to eventually make carbon-neutral steel.
GFG said in a statement on Thursday that SIMEC intended to retain an interest in the projects.
“The projects have been designed to supply and store renewable energy to power GFG’s Whyalla Steelworks, as well as supply renewable energy to the national energy grid,’’ a spokesman said in a statement.
“The partnership and sale options under consideration will include SIMEC retaining an interest and with GFG retaining priority access to this energy for its Whyalla development plans.
“This is a practical step to explore ways to power our Whyalla operations with low cost renewable energy sooner, which is key to our future ambitions.
“These projects are not only important for GFG’s own needs but all also contribute clean and green energy back into the national power grid.’’
Soon after buying the Whyalla steelworks out of administration, GFG bought a half stake in Adelaide company Zen Energy, however it split with Zen last year.
Mr Gupta told The Australian at the time of the split that the new plan was to develop a large portfolio of renewables projects to feed the Whyalla plant with energy and consider a sharemarket float of its green steel assets at some stage.
He told The Australian that he was now targeting 3000MW of power projects in addition to Cultana.
“I wanted to focus on generation because my objective is industrialisation rather than developing a retail business,” Mr Gupta said at the time.
“I really want to focus on doing a much bigger 2000-3000MW plant after Cultana to feed hydrogen. All of our energy projects will be part of an industrial transformation to carbon neutrality. We will finish Cultana first and then step on the gas to do the expansion.”
Originally published as GFG Alliance will look at selling its Cultana solar and Playford battery projects in South Australia
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