For the period ending on 30 June 2024
- Final stages of the construction phase and commencement of the commissioning phase for the Narromine Renewable Energy Project during the Quarter
- Narromine commercial operations achieved after the end of the Quarter
- Acceleration of plan to add battery storage to the Faraday Renewable Energy Project (VIC)
- Process commenced to recycle capital from the Lakeland Solar & Storage Project
- Further investment in MPower’s development activities to support a planned portfolio of clean energy assets across Australia
Sydney – 31 July 2024 – MPower Group Limited (ASX: MPR)
Leading specialist renewable energy, battery storage and microgrid business MPower Group Limited (ASX: MPR) is pleased to provide the following report on its activities for the quarter ending 30 June 2024 (Quarter).
Operational activities in the June Quarter included the final stages of the construction phase and commencement of the commissioning phase for the Narromine Renewable Energy Project in New South Wales, which entered commercial operations and became revenue generating in July 2024.
The Quarter also saw a number of advancements across the Company’s portfolio of clean energy assets as well as an ongoing focus on MPower’s development activities following a bolstering of its in-house development team earlier in the year.
Narromine Renewable Energy Project – construction update
During the Quarter, MPower made significant advances in the delivery of the construction phase of Narromine Renewable Energy Project (NSW) and commenced the commissioning phase.
Construction activities during the Quarter included finalisation of the solar tracking installation, installation of all solar PV modules and associated equipment. MPower’s in-house team commenced the commissioning phase of the project which was successfully completed in July 2024. The project has now reached commercial operations following the successful connection of the project to the grid and export of clean energy at full capacity (refer ASX announcement on 30 July 2024).
The start of commercial operations marks a key milestone for the Narromine project and is the first project that MPower has owned, constructed and commissioned as part of its Build Own Operate strategy.
The Narromine project is now generating and exporting clean energy at full capacity into the National Electricity Market. A merchant market revenue strategy has been adopted, with project revenues determined by the prevailing wholesale spot prices for energy and Large-scale Generation Certificates. MPower continues to assess offers from potential offtake parties to secure the long-term revenues of the project.
The project is funded by AMPYR Energy under a project funding relationship established in March 2023. The funding agreement is structured as a debt facility, with mechanisms to convert to equity in the project linked to the project’s offtake strategy.
Image: Narromine Renewable Energy Project (NSW)
Lakeland Solar & Storage Project (QLD)
MPower commenced a process to sell the Lakeland Solar & Storage Project in Far North Queensland during the Quarter, with the intention of recycling capital for the future expansion of its clean energy portfolio.
The Lakeland project benefits from a long-term Power Purchase Agreement (PPA) with Origin Energy for 100% of its output under a fixed price arrangement that escalates in line with CPI. The project, which is well positioned on the Queensland grid, has a 5.3MWh battery that is capable of being upgraded at the end of the PPA period to take advantage of future volatility in Queensland energy prices.
The project was constructed in 2017 and includes 10.8MWac of solar PV alongside its battery capability. MPower owns 100% of the project following its acquisition in 2022.
Image: Lakeland Solar & Storage Project (QLD)
Portfolio changes
The June Quarter also saw changes to MPower’s Victorian clean energy assets, including:
An acceleration of MPower’s plans to add battery storage to the Faraday Renewable Energy Project in Victoria. MPower owns 100% of the development rights for the 6.7MWdc/4.9MWac solar project that already has planning approval for a battery storage facility. The plan to bring forward the battery storage augmentation reflects the growing value that battery storage adds to renewable energy projects, including the ability to increase the dispatch-weighted average price of energy exported and the availability of additional revenue streams from ancillary services.
Termination of the Asset Purchase Agreement in respect of the Mangalore Renewable Energy Project. MPower entered into an agreement to acquire the rights to the project in August 2021 and the solar PV development project has subsequently encountered a number of challenges. No consideration has been paid by MPower under the terminated agreement.
Further investment in MPower’s project pipeline was a focus during the Quarter, following a bolstering of its in-house development team earlier in the year. MPower is targeting a portfolio of over 30 utility-scale solar and battery projects across Australia’s eastern states and has a proven track record of success at developing, constructing, owning and operating distribution-connected clean energy assets.
MPower’s strategy and plans are supported by the ongoing interest in the inherent capacity within Australia’s distribution networks and the growing recognition of the role of battery energy projects in Australia’s energy transition.
Financial overview
Cash receipts during the Quarter were slightly higher than the previous quarter at $1,229K, comprising revenues generated through the Company’s service and maintenance activities, together with the sale of clean energy and associated renewable energy certificates from the Company’s 100% owned project at Lakeland, Queensland. Cashflows from the sale of energy being generated by the Narromine project will commence in the September quarter now that the project has reached commercial operations.
The main operating cash outflows were operating costs of $498K and staff costs of $583K. Net cash used in operating activities during the Quarter was $248K.
Resources involved in the delivery of the Narromine project are included in cashflows from investing activities (for both the current quarter and year to date).
MPower is in advanced discussions in relation to new and existing funding facilities to support its operations. Commercial terms have been agreed in principle with the counterparties and documentation is being prepared and is expected to be finalised and announced in the coming days.
Comment
Chief Executive Officer Nathan Wise commented: “I’m encouraged by the progress made by the Company this quarter, with successful commissioning of the Narromine project representing a key milestone in the development of the group.”
“As the Company navigates the challenges inherent in the long-term development of clean energy assets, we remain focussed on a rollout of a decentralised portfolio of 30+ clean energy hybrid projects across Australia’s eastern distribution networks. MPower has a proven track record and continues to pursue opportunities to leverage its strategic advantages.”
Payments to related parties
Payments of $72K to related parties and their associates relate to remuneration payments made to the directors of the Company and interest payments on loan facilities.
Ends
Contact
For further information, please contact:
Nathan Wise
Chief Executive Officer
(02) 8788 4600
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