In August 2016, German bank NORD/LB gained a foothold in the Australian renewables market, reaching financial close on one of the world’s first large-scale solar-storage projects together with German developer Conergy – a global leader in solar power. Since then NORD/LB has supported a further 300MW of Australian solar and wind projects, and this is just the beginning as the Australian renewables sector is booming.
After years of political uncertainty, Australia has turned a corner and set some of the most exciting renewable targets and development incentives world-wide. In June 2015, the Australian Government implemented a 33,000 GWh Large-Scale Renewable Energy Target (RET) by 2020, requiring ~AUD 14.5 billion of new investment, increasing to around AUD 100 billion by 2050. To incentivise development of the sector renewable projects receive green certificates, currently trading over AUD 85/MWh, compared with around AUD 30/MWh in 2015, in addition to the wholesale electricity market price. The market response has been overwhelming, with a surge in domestic and international developers, including many of NORD/LB’s clients, seeking a slice of the Australian-opportunity. At the time of writing more than 8,000MW of wind and 2,500MW of solar projects are either under construction or have planning approval, of which 20 large-scale solar projects (totaling 757MW) are seeking ~AUD 100 million of the Australian Renewable Energy Agency (“ARENA”) grant funding, and 2,000MW of projects have applied for finance from CEFC’s Large-Scale Solar Program.
Smoothing out the intermittency of renewable technologies with affordable energy storage solutions is without-doubt the Holy Grail to global sustainable energy transition. The International Renewable Energy Agency (IRENA) estimates that the world needs 150 GW of battery storage to meet its desired target of 45 per cent of power generated from renewable sources by 2030, and Bloomberg New Energy Finance (BNEF) believes the global market could reach at least USD 250 billion by 2040. As the standalone business case for storage technologies continues to improve, NORD/LB has been approached by numerous clients across its 4 main global offices (Hannover, London, New York and Singapore), all looking for a project financing solution.
In August 2016, NORD/LB reached financial close on a AUD 42.5 million, 13MWp solar PV plant with a 1.4MW/5.3MWh battery storage facility in the town of Lakeland, Northern Queensland, Australia. The project is the first large-scale solar and battery storage project world-wide, capable of powering 3,000 homes day and night. Funding was also committed by the ARENA to support the project, and learnings will be shared with local universities thereby building grassroots Australian battery expertise. German solar company, Conergy, is the project owner and developer, and will also act as EPC and O&M contractors. The project is scheduled for completion in Q2 2017.
NORD/LB was a pioneer in renewable energy project finance and since mid-1990s has financed over 13GW of projects worldwide. Building on success in Europe and North-America, NORD/LB has built up a team of 10 renewable energy finance specialists to support its clients as they enter the booming Asia-Pacific market. In 2016, NORD/LB ranked the 4th larggest Mandated Lead Arranger in renewables, with USD 1.8 billion financed across 42 projects.