Enel Green Power, the European energy giant, has recently faced a substantial hit due to the low financial status, stemming from the production delays at the solar farm in Australia. This Bungala solar farm project, which is currently in operation, is located near Port Augusta in South Australia.
This solar farm, with its capacity of 220MW, was anticipated to be the largest solar project to be built in the country till date. However, Bungala 2, which is the second stage of the recent solar project, has been held back allowing less than 20% of the output, reportedly due to technical problems. Bungala 2 has been recently permitted to increase the capacity of the output from 20MW to over 40MW, indicating incomplete further tests.
The project is currently unable to deliver full capacity as per the power purchase agreement signed with Origin Energy for the full commissioning in 2018. Due to this, the company has taken a hit of $A73.5 million (€43 million) to its accounts in 2019. Like other international investors, its parent company, Enel, does not have a positive assessment of the political and regulatory environment in Australia.
The company has reportedly stated that the re-election of the Liberal Party and the election result of May 2019 have led to a decline in the market for renewable energy, with a considerable drop in capacity under development.
The Bungala project is a joint venture between the Dutch Infrastructure Fund IV and Enel. Both these international investors have made investments in other large-scale wind and solar projects in Australia. Apart from these companies, other solar project developers and owners are also suffering from technical issues in their solar farms, either with connection process delays due to the issues of satisfying the performance standard or with registration, or congestion in various parts of the solar grid.