Connected is a conversational quarterly series from New Energy Solar (NEW) that highlights some of the key takeaways from its quarterly report and shares the team’s outlook on the period to come.
New Energy Solar had a busy third quarter. The team ramped up construction efforts to further progress solar plants acquired or under construction across Australia and the United States. It also diligently prepared plants for Hurricane Florence, which ravaged the Carolinas, resulted in at least 40 deaths,1 and is estimated to have cost the region between US$17 billion and $22 billion in damages.2
In September, the team also unveiled its Environmental Impact Calculator, designed to show investors the potential of their investment on the environment. As renewable energy continues to gain more prevalence, this interactive calculator could be a useful tool for visualising the potential investment required for revolutionising the energy sector and reducing negative impacts on our environment.
Following quarter’s end, New Energy Solar also hosted its first ever Investor Day. More than 200 clients travelled from Sydney and Canberra to the Manildra Solar Plant to tour the facility and ask questions, sample palatable local goods, and meet with the communities in both Orange and Manildra. The event was well received and provided investors with the unique opportunity to learn more about the plant’s development, construction and day-to-day workings, as well as observe the operation of a premier solar asset and its effect on the local community. As it continues to deliver emissions-free electricity to consumers, generate financial returns for investors, create new jobs and stimulate economic growth in regional areas, we believe Manildra Solar Plant represents a prime example of the potential of solar generation’s contribution to Australia’s electricity mix. For those who were able to attend the event, it was a pleasure to meet you all in person.
Performance and project pipeline
Five solar power plants were commissioned during the quarter. As at 30 September, New Energy Solar had a total of 12 operating plants, generating more than 178,000 megawatt hours of electricity and displacing the equivalent of 114,000 tonnes of CO2.3
While our California and Nevada assets continued their strong production and produced above management expectations in the month of September, the generation of our solar plants in North Carolina was lower than expected due to the onset of Hurricane Florence. Prior to the hurricane making landfall, however, our US team worked closely with operations and maintenance contractors to execute a comprehensive disaster mitigation plan to protect each site. Thankfully, despite widespread flooding and damage to the region, the plants experienced no material damage and returned to full operations by 10 October.
Closer to home, New Energy Solar officially completed its acquisition of Manildra in September. The team also entered into an agreement to acquire its second Australian solar plant, Beryl, which is underpinned by a 15-year power purchase agreement with the NSW Government statutory authority, Transport for NSW. The plant is expected to be commissioned by mid-2019, and once operational, could generate more than 199,000 MWh of electricity during its first operating year4 – contributing considerable power to the business’s existing portfolio.
Executive Director Tom Kline recently highlighted the key takeaways of the United Nations’ eye-opening Intergovernmental Panel on Climate Change report, Global Warming of 1.5°. Although the report emphasised dire changes that could occur under warming conditions of both 1.5° and 2°5 (and painted an equally dire picture of a world we could soon be living in), it also noted that there was still time to act – but called for rapid scaling and considerable investment in renewable energy.
The report also highlighted the importance of reducing coal-fired generation, with one climate scientist saying the report had made it clear “there is no way to mitigate climate change without getting rid of coal”.6 Although the Australian government has disappointingly steered away from its Clean Energy Target7 and National Energy Guarantee,8many individuals and corporations alike are beginning to see – and act on – the real-time impacts of climate change, even if governments are not.
Fortunately, as the world is heating up, so too is investment in renewable energy. At New Energy Solar, we believe the world could move to electricity generation that does not rely on coal and anticipate that this necessary movement towards a more sustainable future could see a much greater role for solar – and with it, an exciting pipeline of opportunities, much like Manildra.
John joined New Energy Solar as Managing Director and CEO in May 2017. He brings a wealth of experience and capability to the role after more than two decades of experience in corporate advisory and investment banking, with a focus on the infrastructure, energy and utility sectors.