Already a subscriber?A micro solar farm at Grong Grong, a tiny town 5½ hours’ drive west of Sydney, has landed insurance giant IAG as its biggest customer, vindicating its investors’ vision and highlighting the untapped capacity of small-scale community suppliers.
The six-year deal with IAG begins next year and will account for almost all Grong Grong’s output. The deal was struck before Opposition Leader Peter Dutton’s bombshell policy pitch this week to power the grid with nuclear plants which, Of the many ingredients to Grong Grong’s success is its Goldilocks sizing: not too big, not too small. It fits in the sweet spot between one and five megawatts. That’s big enough to be generate a commercial supply but, critically, small enough to exempt it from the controls that the Australian Energy Market Operator applies to larger generators.
And while the business case for Grong Grong did not rely on a power purchase agreement such as the one it subsequently struck with IAG, the facility and its investors can now rely on a steady revenue stream, rather than more volatile returns from the power it would have delivered to the wholesale market.
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