French renewable energy company, Neoen expands across Australia

September 2015

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Opportunities to expand into new international markets like Australia, where renewable energy was expanding attracted leading French renewable energy company, Neoen.

In 2014, 13.47 per cent of Australia’s electricity needs came from renewable sources, enough to power 4.5 million average homes for a year. This was a considerable increase from less than four per cent of Australia’s electricity requirements in 2006.

This rapid change has generated interest from expansion-minded renewable energy market participants in other countries. In 2012, Neoen wanted to expand beyond its traditional markets of France and Portugal.

‘We were looking for a country that had a favourable environment for renewable energy,’ said Franck Woitiez, Managing Director, Neoen Australia.

‘We looked at several countries and regions, including Brazil and North America, but Australia presented the best opportunity for our business.’

Founded in France in 2008, Neoen operates in several markets which include Mexico, Egypt and El Salvador. The business develops, finances, builds and operates power plants using renewable sources such as solar, wind and biomass. The company aims to have installed more than 1,000 MW of power by 2017.

Neoen enters Australia

In March 2012 Austrade invited Neoen’s management in Paris to an investment seminar on the future of Australia’s clean energy sector and the relationship strengthened as Austrade provided tailored support.

In June and September 2012 Austrade organised a comprehensive visit program for Neoen around Australia, which enabled Neoen to meet with key contacts in government and industry.

Part of this program included an introduction to the Australian Capital Territory (ACT) government, and subsequent visits included introductions to executives at the Australian entity of South African bank Investec.

The ACT government wanted to establish Canberra as a renewable energy hub, while Investec was looking to discontinue its renewable energy activities after an internal business review.

Woitiez said Austrade’s facilitation efforts played a key role in Neoen’s decision to target Australia.

’We have been supported by Austrade since 2012 and up until mid-2014,’ said Woitiez.

’Austrade helped us form a view on the attractiveness of Australia and then, every time they could suggest our name to new parties or give us information about opportunities for tenders or direct agreements, they did.’

Neoen then started designing offers and negotiating the purchase of more than 1 GW of wind farm development sites from Investec Australia Limited.

Neoen acquires Hornsdale from Investec

In March 2014, Neoen and partners Megawatt Capital Investments acquired the 270 MW Hornsdale Wind Farm project from Investec.

The project − located near Jamestown in South Australia, about 200 kilometres north of Adelaide – will take advantage of exceptional winds to become one of Australia’s most competitive renewable wind installations. Construction is due to start in August 2015 and be completed by early 2017, according to Woitiez.

At the ACT’s first wind energy reverse auction in February 2015, Neoen and Megawall Capital Investments were awarded a 20 year feed-in-tariff for the 100 MW first stage of the project.

Romain Desrousseaux, Deputy CEO of Neoen, said the achievement ‘validates Neoen’s strategy to invest in Australia where the wind and solar resources are outstanding.’

Hornsdale wind farm is expected to deliver enough energy to meet 15 per cent of Canberra’s electricity needs. This is expected to result in a 372,000 tonne reduction in the ACT’s carbon emissions each year – the equivalent of taking 108,000 cars off the road.

Asia-Pacific renewable energy hub

These projects prompted Neoen to open an Asia-Pacific head office for its wind development activities in Canberra, while the business has pledged to improve its cooperation with the city’s efforts to become a renewable energy hub.

Neoen has also announced a 20-year investment in the Renewable Energy Skills Centre of Excellence at the Canberra Institute of Technology.

’The idea was to demonstrate that being supported by the ACT government was not a free option to build a wind farm and then walk away,’ said Woitiez.

‘Part of our submission to the tender and our commitment was to build a sustainable relationship with Australia’s renewable energy sector.

’The Renewable Energy Skills Centre of Excellence was an important part of that commitment and is being funded for the long-term through the Hornsdale Wind Farm.

‘The centre brings to Canberra a very industry skill oriented course for wind farm training and maintenance.’

Neoen develops its Australian renewables footprint

Neoen is very much in expansion mode, with plans to install several solar plants ranging from 10-30 MW in size around Dubbo, Narromine, Griffith, Parkes and Gilgandra in New South Wales.

‘We are still working on the rest of our portfolio. We have a target of 600 megawatts of projects either or in the construction stage in Australia by 2020,’ said Woitiez.

This trend is evidenced by Neoen’s recent acquisition of the DeGrussa solar hybrid power plant – Australia’s largest off-grid power plant developed, built and operated by energy company juwi.

It will also reduce diesel consumption and cut carbon emissions by more than 12,000 tonnes of CO2.

The 10.6MW solar power plant, containing 34,080 solar panels spread over 20 hectares, will be built in the desert at the DeGrussa copper and gold mine about 900 km from Perth.

Woitiez said this deal is a major step towards making Neoen the leading player in the hybrid solar power plants.

The project was acquired with the assistance of the Clean Energy Finance Corporation which committed nearly $15 million in finance, while the Australian Renewable Energy Agency provided $20.9 million.

‘Austrade helped us in the Australian way with a very, very large sense of hospitality, and we were always warmly welcomed by every party we had discussions with.

‘Austrade always helped us get in touch with the right people, or made sure we had the proper introductions,’ added Woitiez.