THE BOURSE WHISPERER: Red Sky Energy (ASX: ROG) has secured an option to purchase a site for a major solar power station in south west New South Wales.
The deal has emerged via solar energy company, SOLEIR, which Red Sky acquired in November last year.
SOLEIR has negotiated a three year option over a 269 hectare site located at Darlington Point, located approximately 150 kilometres west of Wagga Wagga, which may accommodate a 100 megawatt (MW) photovoltaic (PV) solar power project.
SOLEIR is a developer of utility scale PV solar power projects, and is already well advanced with its first project, the Dubbo Solar One project in central New South Wales.
The first module of the Dubbo Solar One project is on schedule to be installed by mid-year.
As part of its growth plans, SOLEIR has been negotiating rights to a number of suitable project sites in regional NSW, and the Darlington Point site is proposed to be part of its project portfolio.
The Darlington Point area was one of five shortlisted for detailed study after being the focus of a report commissioned by NSW Department of Environment, Climate Change and Water in December 2010, entitled “Pre-Feasibility Study for a Solar Power Precinct”.
The report identified the area as a good solar resource, concluding a 250MW project would have low connection costs into the TransGrid sub-station at Darlington Point.
“The optioned Darlington Point site is ideally situated adjacent the major TransGrid sub-station, which has 330 kilovolt (kV) and 220kV power transmission lines connected to it,” Red Sky Energy said in its ASX announcement.
“Based on the abovementioned study, it is reasonable to assume 100MW could be readily accommodated by the existing sub-station.
“This would need to be validated through the connection agreement process with TransGrid.”
Red Gum explained the agreement on the Darlington Point site gives SOLEIR the option to purchase the land at any time over the next three years, at a pre-agreed price.
The purchase price is less than one per cent of the solar project capital cost.
Red Gum anticipates SOLEIR commencing the process to secure development consent with the NSW State Government and a connection agreement with TransGrid in the coming months.
In addition to regulatory approvals, SOLIER will be seeking the involvement of a major financial institution to arrange the project funding.