By Gavin Evans
July 8 (BusinessDesk) - Refining NZ is considering installing a 26-megawatt solar electricity generation array alongside the Marsden Point oil refinery.
The proposed project would cover 31 hectares of company-owned land and is expected to cost $36-to-$39 million. If it proceeds, the project would be funded with up to $15 million of equity from the company and non-recourse project debt.
Chairman Simon Allen said advancing the project is contingent on the refinery’s board being satisfied the project is economically viable. The firm is also engaging with local stakeholders before seeking resource consents for what would be the country’s biggest solar farm.
“Early work shows that the solar farm would reduce the cost of the refinery’s electricity consumption and have a positive impact on shareholder value,” Allen said in a statement to the NZX.
The company’s shares last traded at $2.08 and are down about 8 percent this year.
Marsden Point, the country’s sole oil refinery, has spent more than a year looking at the potential of new technologies – including solar and hydrogen – to lower its costs or to form the basis of new, low-carbon business lines in the future.
The firm is already one of the country’s biggest users of hydrogen and in the past has also investigated generating its own power on site from wood waste. It is a major user of power and natural gas.
“This solar facility is one of a number of options being considered as part of the company’s long-term business strategy,” chief executive Mike Fuge said. “First and foremost, this facility would allow Refining NZ to reduce its electricity costs, which is one of the biggest costs for the company.”
New Zealand has about 97 MW of installed solar – only about 16 MW of which is at industrial and commercial sites. Last month, Contact Energy acquired a stake in independent generation specialist Simply Energy as part of its strategy to help major industrial customers use new technology to reduce their carbon footprints.
Just over 1.9 percent of homes and businesses in Northland have solar – the fourth-highest rate after Nelson, Tasman and Marlborough, according to Electricity Authority data.
Fuge says the project would take advantage of the high-quality solar resource in Northland as the country “greens” its transport sector as part of a broader transition to a low-carbon economy.