NT solar: ENI, responsible minister decline to say whether compensation on the cards

The owner of three stranded solar farms south of Darwin and the responsible minister have both declined to say whether the NT government could be on the hook for a big compensation bill.

ENI Australia Ltd’s Manton Dam Solar Farm. Picture: Che Chorley

The owner of three stranded solar farms south of Darwin and the minister responsible have both declined to say whether the NT government could be on the hook for a big compensation bill.

ENI Plenitude Australia, which owns solar farms at Batchelor, Manton Dam and Katherine, and Renewables Minister Kate Worden, told the NT News either “no comment” or cited commercial-in-confidence rules when asked the question recently.

Despite all being completed in 2020, the only one of ENI’s solar farms, which are contracted to supply Jacana Energy, that is currently producing electricity is Katherine, which is operating at 25 per cent capacity.

Merricks Capital’s 10MW solar farm, which is contracted to Rimfire Energy, has likewise been unable to be commissioned.

The ongoing struggle to commission the farms is due to Power and Water Corporation’s concerns as system operator of the Darwin-Katherine Interconnected System that large additions of intermittent solar would destabilise the grid in the absence of additional stabilisers such as large-scale battery or pumped hydro storage.

Renewables Minister Kate Worden. Picture: Pema Tamang Pakhrin

While ENI issued a firm “no comment” to questions including whether legal proceedings are afoot, whether compensation was available under contracts, and whether it was in discussion with the NT government to nationalise the assets – which Chief Minister Eva Lawler recently conceded was a possibility – ENI has previously revealed the scale of its frustrations in public submissions to the Utilities Commission.

Those submissions, filed in mid-2020, expressed ENI’s deep concern with proposed new Generator Performance Standards – subsequently approved by the Utilities Commission – to be imposed upon all generators larger than 2MW.

ENI, which purchased its three farms prior to the new standards being developed, took particular exception to a requirement that solar generators must include the ability to provide a 24-hour forecast of capacity for every five minute interval, updated at five minute intervals, to an accuracy of 90 per cent to the system operator.

In the submissions, ENI said complying with the provision would cost “in excess” of $25m upfront, in addition to higher maintenance costs over the life of the project, and expressed fury at the lack of “grandfathering” provisions.

“This precedent would create a degree of regulatory risk which will significantly raise the cost of capital for new renewable energy investment in the NT, a form of energy generation that relies on a low cost of capital, thereby creating an additional unnecessary barrier to market entry,” ENI said in one of the submissions.

Last year, Jacana Energy put out a tender seeking expressions of interest to establish three new solar farms to supply 100MW for the Darwin-Katherine grid, with a stipulation that the proponents must include at least 10MWh of battery storage in their plans.

About a dozen companies expressed their interest.

Jacana continues to consider their proposals, a spokeswoman for the utility said.

Of the four utility-scale solar farms in the Top End, only Katherine has co-located battery storage, hence its ability to be partially commissioned while the other three sit idle.