Renewables Infrastructure Group Buys Three U.K. Solar Farms

Windorah_Solar_FarmThe Renewables Infrastructure Group has agreed to buy three U.K. solar farms from a venture between British Solar Renewables Ltd. and Banco Santander SA. The photovoltaic farms total 56.6 megawatts of generation capacity and are valued at 73.7 million pounds ($124 million), although the final amount depends on plant performance.

All three sites were built by Spain’s Grupo Isolux Corsan SA, with panels from ReneSola Ltd. The sites include a 24.2MW plant at Parley Court Farm, Dorset, a 21.2MW plant at Egmere Airfield, Norfolk and an 11.1MW project at Penare Farm, Cornwall. According to TRIG, the purchase was funded by a combination of cash and a revolving acquisition facility.

John Kirk shares his thoughts as someone who has spent decades working in high voltage construction and maintenance. “I have a considerable amount of expertise in the high voltage area. Each of the forms of power generation have pros and cons. Wind turbine is best bang for buck, except that there is a grow push back from public due to low frequency noise. All studies not in yet, but there is some concern (the debate continues), as well as air path interference (again the debate continues).

Tidal generation (using incoming and out-going ocean tides to generate power—lots of discussions with many groups on this one) might be a while coming and include high costs. Solar has many pros, as long as you can get a good deal on some un-useable land, as it takes approximately 100 Hectares of land to produce one megawatt of power.

“You also need a good maintenance program in place, and solar array has to be articulating to capture ideal solar potential to help keep panels clean, even with high gloss self-cleaning panels. As with any large scale project, you need accurate initial bids. The lowest bid with an unseasoned bidder can be a disaster. Even experienced companies that can’t get the right people (and keep them) will have a difficult time. The best way to look at these projects is using a similar existing project as a bench mark.

“Many factors come into play, but keep this in mind: “If it sounds too good to be true…it most likely is.” Hence, you need a top notch team, but in reality, they don’t come cheap. I have the highest respect for all engineers, to be used in the design phase of any project, but it makes no sense to have a group of people that have never even built a garden shed, be in charge of any kind of construction project. You need seasoned pros to look after the build and engineers to support them. Of course, this is just my opinion—but with 35 years of experience behind it.”

Technology and business consultant Bruce Robins says, “It is a bit hard to comment without knowing if the 56.6MW is the nominal or feed in capacity, and the Feed-in Tariff which applies and the age of the systems. At US$2.19/Wp it appears a bit overvalued given that there is a gradual decline in output over the life of the system—which no amount of O&M can fix—and that PV modules today are less than US$0.60/Wp CIF, and modules represent around 45% of installed cost in the part of the world where I operate. But good luck to TRIG. We should be encouraging more of this type of acquisitions particularly by superannuation funds because most projects are extremely low risk.”

Michael Orshan is an executive director in energy solar management. He says, “Around the globe there is a very active business of buying PPAs once a plant is operational. It is a process similar to hedge funds. Some group raises money. Another group is created to find PPAs to buy. Remember the group that built the farm has just invested a lot of cash to build the farm and now has this experience. With incentives still in place they are well positioned to do this again. Especially at these relatively low power outputs of less than 10MW, there were few economies of scales so the implementers probably paid a higher price, cashing out, paying financiers, and going to the next project is probably the best thing. As for this particular transaction I can only assume this was the process and the numbers made sense. In the end the bank will be happy as will the implementers.”

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