NZ Green Investment Finance injects $78m to boost solar power portfolio
NZ Green Investment Finance (NZGIF), a Government-owned investment vehicle, is investing $78 million to help bring most of a $2 billion portfolio of solar power online in the next five years.
Far North Solar Farm (FNSF), the company developing the generation, says it has 1.4 gigawatts (GW) of solar farms under development, which is equivalent to 15% of New Zealand’s total daily energy demand.
FNSF director Richard Homewood said that a shift to using more solar and wind could make the country more resilient to crises by allowing the country to store more hydro, which is currently relied on as baseload.
Homewood said part of the current problem was that New Zealand is “using hydro as a baseload whereas we should be treating hydro as a reserve, but we can’t treat hydro as a reserve until we have other forms of additional energy”.
“So we need a significant amount of new wind [and] a significant amount of new large-scale solar,” he said.
The five planned Far North Solar Farm sites for which NZGIF financing is available comprise 80% of the company’s $2b portfolio and will eventually generate around 1.13GW of new clean electricity, enough to power around 178,000 homes each year.
Homewood said the investment will go towards upgrading existing substations and building new ones as well to connect the solar farms to the grid.
The solar farms are on both islands and include what will be New Zealand’s largest, which will generate 420 megawatts (MW) and is over 670 hectares in size.
Homewood said the deal included $22m works agreement contract with Transpower which allows the company to connect to the grid to supply power.
The three parties, NZGIF, FNSF and Transpower signed the agreement at Parliament on Tuesday evening.
Transpower’s executive general manager customer and external affairs Raewyn Moss said the ability for a developer " to access capital is another critical element of getting renewable energy developments off the ground and NZGIF can play a key role in that going forward”.
She said Transpower had “a significant pipeline of other generation projects that want to connect to the national grid which are critical both for security of supply and the decarbonisation of our economy”.
NZGIF chief executive Sarah Minhinnick said the “Connection Facility Agreement is a tailored solution, designed by NZGIF, to introduce a new pool of capital to accelerate renewable energy generation in New Zealand. We look forward to seeing more private capital driven towards these solar developments”.
NZGIF was established under the last Government by then Climate Change Minister James Shaw to make strategic investments to help decarbonise the economy.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.