London — Neoen has bought eight wind farms in the Republic of Ireland with a total capacity of 53.4 MW for Eur25.8 million ($28.6 million), the French company said late Thursday.
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Register NowThe deal cements Neoen's presence in Ireland, where it has a development business and where the government has raised its renewable energy and interconnection targets under an ambitious climate plan.
"Ireland has a very high potential for the development of renewable energy, boosted by the achievement of grid parity," said Neoen CEO Xavier Barbaro.
Grid parity - when renewable energy costs equate to merchant energy costs on wholesale markets - opens the way for development of non-subsidized renewables backed by power purchase agreements, an area of expertise for Neoen in other markets.
The Irish wind assets, with an enterprise value of Eur46 million, have been acquired from the Irish Infrastructure Fund (co-managed by AMP Capital and Irish Life Investment Managers) and Energia Group, which held a minority stake.
The wind farms were commissioned between 1998 and 2012. Output is sold under power purchase agreements.
As these PPAs expire, Neoen would negotiate fresh offtake deals while exploring "promising repowering potential for the oldest of these assets, in order to better tap the wind resources," it said.
From 2020, and without accounting for optimization or repowering potential, Neoen said the wind farms would generate around Eur5 million of EBITDA per year.
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GLOBAL DEVELOPER, PROMISING MARKET
Neoen has 2.8 GW of renewable capacity in operation or under construction in France, Australia, Mexico, El Salvador, Argentina, Finland, Zambia, Jamaica and Portugal.
It operates Europe's largest solar PV farm, the 300 MWp in Cestas, France, and the world's largest lithium-ion storage battery, the 100 MW/129 MWh Hornsdale facility in Australia. It aims to have over 5 GW in operation or under construction by 2021.
Competitive auctions in Ireland are to deliver additions of up to 8.2 GW of onshore wind, 3.5 GW of offshore wind and 1.5 GW of gridscale solar by 2030 under a new climate plan announced June 17, with the government promising to accelerate efforts to put a consenting and grid connection framework in place for offshore energy.
Incentives for electricity interconnection to France and the UK, meanwhile, would be "critical to absorbing high levels of renewablegeneration on to the system," the Irish government said.
The 700 MW Celtic Interconnector to France is expected to come online in 2026. The 500 MW Greenlink Interconnector to the UK aims toreceive regulatory approval by early 2020 and is expected to come online in 2023.
-- Henry Edwardes-Evans, Henry.Edwardes-Evans@spglobal.com
-- Edited by Nurul Darni, nurul.indriani.darni@spglobal.com