Fonterra Secures Major Renewable Energy Supply from Canterbury Solar Farm
Fonterra, a major player in the dairy industry, has entered into a significant agreement with ANZA Power for a virtual power purchase arrangement. This agreement allows Fonterra to obtain 80% of the electricity generated by the Somerton Solar Farm, located near Rakaia in the Canterbury region of New Zealand. The solar farm is set to deliver 42 megawatts of direct current (MWdc) solar generation capacity.
ANZA Power, backed by I Squared Capital, an infrastructure investor, is responsible for developing, owning, and operating the solar farm. The project is supported by a substantial equity commitment of USD 300 million from I Squared Capital, which is ultimately owned by the Singapore-based ANZ Renewables GMF II Investments Pte.
Once operational, the Somerton Solar Farm is expected to produce approximately 65,000 megawatt-hours (MWh) of renewable electricity annually. This initiative supports Fonterra's strategy to enhance its access to renewable energy sources and secure long-term price stability for its operations, as highlighted by Fonterra's Chief Operating Officer, Anna Palairet. She emphasized that this partnership is pivotal in bolstering the renewable energy sector in New Zealand.
The solar farm will connect to the EA Network's grid, strategically positioned between Fonterra's Darfield and Clandeboye manufacturing sites. Additionally, the infrastructure is designed to accommodate future battery energy storage systems without significant modifications, ensuring scalability for future energy solutions.
A virtual power purchase agreement, such as the one between Fonterra and ANZA Power, serves as a financial mechanism. It enables the energy buyer, Fonterra in this case, to pay a pre-agreed price for the project's energy output. This arrangement provides a hedge against fluctuating electricity prices. The market price at the time of sale determines the financial exchange between ANZA and Fonterra, balancing the difference if the market price diverges from the fixed rate.
ANZA Power has described the Somerton Solar Farm as its most advanced project in New Zealand to date. This development marks a significant step in the nation's renewable energy landscape, contributing to its sustainability goals and energy security.
