Solar Power Generation Facility BUSINESS CASE

BUSINESS CASE Prepared by Berri Barmera Council in support on the funding

submission to the State Local Government Infrastructure

Partnership

Berri Renewable Energy

Solar Power Generation

Facility February 2017

Berri Barmera Council Business Case for Berri Renewable Energy Solar Generation Facility

SLGIP Funding Submission February 2017

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Table of Contents

Executive Summary 3

Strategic Assessment 6

Project Description 9

Strategic Alignment 13

Alignment with Council Strategic Management Plan 13

Local Government Act and Riverland Development Plan 14

Alignment with SA Strategic Plan 17

Ten Economic Priorities 17

Planning Strategy for SA 20

Strategic Infrastructure Plan for SA 21

Integrated Transport and Land Use Plan 22

Stakeholder Engagement 23

The Case for Investment 24

Overview 24

Background 25

Objectives/benefits/outputs 28

Economic growth 28

Reliable power supply 29

Project beneficiaries 30

Options analysis 32

Project Management 33

Project delivery 33

Project management capacity 35

Project evaluation 36

Project Funding 38



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Figure 1 Berri Barmera Council Area 8

Figure 2: Solar Power Generation Facility framed PV modules 9

Figure 3: Site of Renewable Energy Solar Power Generation Facility 11

Attachment 1: Development Application

Attachment 2: Risk Management Plan

Attachment 3: Financial Model

Attachment 4 Regulatory Review

Attachment 5 Project Delivery and Expenditure Plan

Attachment 6 Independent Cost Estimate

Attachment 7 Berri Barmera Council Long Term Financial Plan



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Executive Summary

Berri Barmera Council is committed to leading the way in South Australia as a showcase

‘renewable energy region.’ Construction of a solar farm will reduce Council’s carbon footprint

and deliver a predictable and cost-effective renewable energy supply for the region.

Recently there has been significant increases and volatility in power costs to key Riverland local

businesses including those with high energy needs. Economic diversification and development

in the Riverland is constrained by the cost and unreliability of power to grow existing business

and attract new business. Construction of the Berri Renewable Energy Solar Power Generation

Facility is in response to a localised need for affordable power to users with high load

requirements to support business, local economic growth and stability of the Riverland region.

An independent financial modelling process has been completed and confirms the solar farm’s

viability. A development application has been lodged and a feasibility study and Prudential

Review will be completed by April 2017 when design and development will commence.

Construction of the Solar Power Generation Facility will begin in September 2017 and be

completed by September 2018. A project risk management plan, independent costings, works

schedule and expenditure plan are attached in support of this business case.

Funding through the State Local Government Infrastructure Program (SLGIP) will accelerate

this project providing an immediate economic stimulus through construction and job creation.

Economic analysis on other solar farms have been used to determine the economic value of the

Berri Solar Power Generation Facility1 which will create 132 full time jobs during construction

and 3 full time positions during the operation of the plant. More than 50 flow on and indirect jobs

in regional industries will result from this project.

1 Mount Remarkable Study 2013. Based on 11 construction jobs/MW and 0.3ongoing jobs/MW



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Specifically, economic benefits include2:

Employment

Gross value added – labour, goods and materials sources locally

Skills – providing skills for local workers providing the foundation to support future solar

projects in the region and state

Long term economic growth strategy – contribute to diversifying the economy and build

local skills

Supply chain development – Australian manufacturing of tracker systems, power cables,

switch gears and construction and installation of plants

A significant benefit of the Berri Renewable Energy Solar Power Generation Facility will be

through 5.5 km of transmission cabling, Accolade Wines and CIT in Glossop can access power

behind the meter. This increases the returns for the Facility and delivers greater benefits and

reliability of power to these companies.

This project is scaleable and would allow for a larger array if the power consumption increases

or batteries become a more viable storage option.

The Berri Renewable Energy Solar Power Generation Facility will deliver on the South

Australian Government’s ongoing commitment to invest in renewal energy projects in regional

South Australia. This project aligns and delivers on the priorities outlined in key SA Plans below.

In addition, this project also delivers on the Low Carbon Investment Plan for South Australia and

the SA Climate Change Strategy.

South Australia’s Strategic Plan

Ten Economic Priorities

Planning Strategy for South Australia

Strategic Infrastructure Plan for South Australia

Integrated Transport and Land Use Plan (ITLUP)

2 AECOM Australia Pty Ltd (2010) Economic Benefits from Solar Flagship Project. BP Solar/FRV Consortium



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The cost to construct the Berri Renewable Energy Solar Power Generation Facility is $25.17M.

Council is seeking a partnership with the SLGIP for 20% of costs i.e. $5.034M.

Berri Barmera Council staff will contract a separate project manager of oversee the construction

of this project. To support sound project management principles, Council has prepared a risk

management plan for the project –project reporting for construction will occur in line with the

agreed funding deed and milestones. Longer term reporting on outcomes will occur through the

Council’s reporting process using the logical connection between the completed project and the

intended results. A comprehensive project final report will provide details of the outcomes

achieved.

Measurable indicators can identify progress towards achieving project objectives:

Accelerating regional economic growth

Cost effective and reliable power supply



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Strategic Assessment

The proponents (applicant)

The Berri Barmera Council area is located within the Riverland, three hours’ drive to the north

east of Adelaide. The Berri Barmera Council is one of three Council areas within the Riverland

which border the River Murray from Blanchetown in the west to Paringa in the east. The Berri

Barmera Council is located within the heart of the Riverland and incorporates some spectacular

scenery and over 65 kilometres of the River Murray, see Figure 1.

The Berri Barmera Council is in the Riverland region of South Australia. The Riverland

population is approximately 33,000 with the Berri Barmera Council population 10,500.

The area is 50,845ha which incorporates the townships of Barmera, Berri, Cobdogla, Glossop,

Loveday, Monash, Overland Corner and Winkie. The economic base of the community is driven

by horticulture and viticulture and associated industries. Berri has traditionally serviced the

region for state and federal government services. Other major sources of economic

development within the area include Accolade Wines Australia located at Glossop, tourism and

retail shopping.

The Berri Barmera area has its origins in the pastoral holdings which occupied extensive tracts

of land adjacent the River Murray as early as the 1850s. The first overland stock route between

New South Wales and South Australia established by Joseph Hawdon and Charles Bonney in

1838 saw the development of Overland Corner as an important staging post for drovers. The

River Murray also attracts visitors to the area for many recreational pursuits e.g. water skiing,

fishing and house boating. Lake Bonney is also located within the Berri Barmera area and is a

key tourist and recreational attraction. The Berri Barmera Council accounts for 34% of the

Riverland population of 33 460. The Riverland unlike other country regions has a stable

population with a small percentage increase.

Berri has a population of 6802, is the major town (originally part of the Cobdogla Sheep Station),

the business heart of the district and the location for many government offices. The Berri Bridge

completed in 1997 has proved to be of great benefit to business and the community.

Barmera with a population of 4132 is located on the shores of Lake Bonney and is a popular

area for recreational pursuits and tourism opportunities. The town should experience a small

growth in population and allowance for this should be made.



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The region has a well-earned reputation for an outdoor lifestyle and sporting excellence coupled

with a naturally friendly and outgoing social acceptance. Berri Barmera Council is very much a

River Murray local government body with their future linked hand in hand with the health of the

river for their economy, recreation and amenity.

Berri Barmera Council is the applicant for the Berri Renewable Energy Solar Power Generation

Facility project submission to the State Local Government Infrastructure Partnership (SLGIP).

To complete the Facility, Council is seeking the SA Government as an investment partner.

Council will fund 80% of the project, $20.136M and is seeking $5.034.9M from the SLGIP.

Council is committed to operating a financial sustainable manner and has conducted a financial

analysis of the Facility which confirms the feasibility of the project.

Berri Barmera Council is in a strong financial position and has developed rigorous policies and

processes to ensure that funds are spent and managed in accordance with Local Government

Legislative requirements. Council has provisioned their contribution to this Facility in the long

term financial plan

1. Council financial commitment $20.136M

2. Partnership Funding from SLGIP $5.034M

Total Project Costs $25.17

Figure 1: Berri Barmera Council Area

Project Description

Project nature and infrastructure

The Berri Renewable Energy Solar Power Generation Facility involves the construction of series

of photovoltaic panels mounted on steel frames. The Facility will have 10 MW capacity The

framed PV modules will be at a fixed horizontal height of approx. 2.9m above ground - see

Figure 2 below.

The land for the Solar Power Generation Facility project is freehold and Council has owned the

title for several decades. The facility requires a relatively even surface level site occupying 30

Ha (hectares) of land. The land is currently vacant and is zoned as ‘infrastructure.’ Previous

uses of the land include a racecourse, wastewater lagoons and irrigation. Development

approval for site coverage required for the Facility has been sought in accordance with

submitted plans and drawings (refer Attachment 1).

The Facility contains the following key components:

Solar PV modules with trackers

Inverters and medium voltage step up transformers

Underground electrical conduits and cabling to connect the arrays to the inverters and

transformers

Transformer station and switchgear

A supervisory control and data acquisition (SCADA) control system

A site office and maintenance building



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Main Gate

Security cameras

Internal access tracks

Laydown area

Perimeter security fencing; and native vegetation hedges

Project location

Property location Moritz Road Berri

Valuation Nos. A2527; A2526 and A2528

CT Reference CT 5979/41 and CT 5937/730

Plan Nos. Parcel Nos. H740200S498; H740200S726;

H740200S500; H740200S499

Berri Barmera Council owns substantial under-utilised land to the north of the township which is

very well suited for renewable energy generation solar array due to the lands’ proximity to an SA

Power Network substation.

The identified 35-hectare site is located to the south of Hoskin Road and bounded by Moritz

Road to the east – see Figure 3. To the west, the site is bounded by private allotments with

residential properties off Minnis Road, a large native copse to the north west and other

commercial land use activities to the south west. The site is separated from Jellett Road to the

south by an active vineyard and now abandoned orchard.

The chosen site provides economical grid connection costs and relatively flat land located in

appropriate zoning. The site also presents no environmental or cultural heritage constraints for a

development of this nature.



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Figure 3: Site of Berri Renewable Energy Solar Power Generation Facility

Financial Sustainability

Berri Barmera Council has a strong history in managing grant funding which provides

confidence to the LGASA that the grant will be expended according to the grant agreement –

see Project Management section for relevant experience. Risks associated with project delivery

and ongoing management have been addressed in the Risk Management Plan – See

Attachment 2.

Berri Barmera Council has sufficient funds to meet its obligations for the project through its own

cash reserves, and borrowings through the Local Government Financing Authority. To validate

that the project is investment ready with construction to commence within months of signing the

funding agreement, reference can be made to Berri Barmera Council Annual Business Plan

2014/15 and Long Term Financial Plan 2014/24 – see links on submission form. Council’s

financial position and the ability to fund any cost overruns and maintain the project in the long

term are also outlined in Council’s Long Term Financial Plan.



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Council will take on the level of indebtedness as part of delivering this project and to ensure

long-term financial sustainability, they have completed relevant financial modeling for inclusion

of this project in their long-term operations. Council can confirm that the project will be in

addition to any existing expenditure committed for the next 2 years. Costs for the Solar Power

Generation Facility are reflected in the revised capital expenditure figures outlined in the

application.

Council operates within a range of prudential management policies, practices and procedures

relating to all areas of operation that align with the Local Government Act (1999), specifically

Part 3, Prudential requirements. The project aligns and reflects all prudential requirements

under the Act.

Council has an established asset and financial management strategy which covers maintenance

of all council assets. Council will manage and maintain all aspects of the Solar Power

Generation Facility and has apportioned appropriate recurrent funds and resources in their

annual budget and capital works program from 2017/18 inclusive.



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Strategic Alignment

Alignment with Council Strategic Management Plans

The Solar Power Generation Facility is an important community asset for the future of region.

It is a key outcome of Council’s Strategic Plan: Goal 4: Valued Natural

Environment/Resources, Objective 1: We will explore alternative energy supplies to reduce our

carbon footprint.

The Facility aligns and delivers on all five goals outlined in the Berri Barmera Strategic Plan –

see below and is a specific objective

1. Confident and contributing community – the solar power facility will create jobs and

improve the liveability of the town and region

2. Diverse economy – the solar power facility will facilitate business development and

business diversification that will broaden the economic base

3. Smart infrastructure – renewable power facilities are smart infrastructure and the new

facility will use modern and leading technologies for energy efficiency

4. Valued Natural environment/resources – taking advantage of natural resources such

as sun will work towards self -reliance on energy and reduce energy costs for the

community

5. Strong internal capability and capacity – Council maintains strong procurement,

monitoring and evaluation processes to ensure it remains prudent with decision making

and spending

The project has been evaluated against State strategic documents and the relevant provisions

of the Berri Barmera Council Development Plan (consolidated 29 November 2012). Overall, the

proposed works are consistent with a number of state strategic directions and are not at

variance with the desired outcomes of the Berri Barmera Council Development Plan.



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Local Government Act and Riverland Development Plan

Berri Barmera Council have a range of prudential management policies, practices and

procedures relating to all areas of operation that align with the Local Government Act (1999),

specifically Part 3, Prudential requirements for certain activities. The project aligns and reflects

all prudential requirements under the Act.

The project aligns with the objectives of the Berri Barmera Development Plan (consolidated 8

December 2016)3, specifically:

Energy efficiency

1. Development designed and sited to conserve energy and minimise waster

2. Development that provides for on-site power generation including photovoltaic cells and

wind power

3 http://www.dpti.sa.gov.au/__data/assets/pdf_file/0003/249960/Berri_Barmera_Council_Development_Plan.pdf



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Industrial development

1. Industrial, warehouse, storage, commercial and transport distribution development on

appropriately located land, integrated with transport networks and designed to minimise

potential impact on these networks

2. The development of agricultural industries, wineries, mineral water extraction and

processing plants, and home based industries in rural areas

3. Industrially zoned allotments and uses protected from encroachment by adjoining uses

that would reduce industrial development or expansion

4. Industrial development occurring without adverse effects on the health and amenity of

occupiers of land in adjoining zones

5. Compatibility between industrial uses within industrial zones

6. The improved amenity of industrial areas

7. Co-location of industries in townships to enable promotion and implementation of

innovative waste recovery practices, methods of power generation and re-use of by-

products.

Infrastructure

1. Infrastructure provided in an economical and environmentally sensitive manner

2. Infrastructure, including social infrastructure, provided in advance of need

3. Suitable land for infrastructure identified and set aside in advance of need

4. The visual impact of infrastructure facilities minimised

5. The efficient and cost-effective use of existing infrastructure

6. Development within the River Murray valley be connected to an approved water

reticulation and sewage disposal scheme

Renewable Energy Facilities

1. Development of renewable energy facilities that benefit the environment, the community

and the state

2. The development of renewable energy facilities, such as wind farms and ancillary

development, in areas that provide opportunity to harvest natural resources for the

efficient generation of electricity



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3. Location, siting, design and operation of renewable energy facilities to avoid or minimise

adverse impacts on the natural environment and other land uses.

Infrastructure Zone

1. Primarily, a zone for the provision of infrastructure

2. Infrastructure facilities and land required for infrastructure facilities preserved from the

encroachment of incompatible land uses

3. Development designed and sited to establish and maintain high amenity along zone

interfaces and public access roads and to protect native vegetation.

Alignment with State Government priorities

The South Australian Government has a vision to make South Australia a place where people

and businesses thrive. Underpinning this vision is the committed to establish Adelaide as the

world’s first carbon neutral city which complements the economic priority to unlock the full

potential of South Australia’s resources, energy and renewable energy assets.

The SA Government has committed to renewable energy and low carbon generation

investment providing significant economic benefit to regional and state economies. Since 2003

there has been 5.5 billion in investment in renewal energy in South Australia with 40% of this

occurring in regional areas.

The Berri Renewable Energy Solar Power Generation Facility will deliver on the South

Australian Government’s ongoing commitment to invest in renewal energy projects in regional

South Australia. This project aligns and delivers on the priorities outlined in key SA Plans

below. In addition, this project also delivers on the Low Carbon Investment Plan for South

Australia and the SA Climate Change Strategy.



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SA Strategic Plan

This project will deliver on SA seven strategic priorities including:

An affordable place to live– providing cost effective and reliable energy will improve

affordability of living in South Australia, job creation in regional SA will accelerate

economic and population growth

Growing Advanced Manufacturing – affordable and reliable energy will support growth

and diversification in industry and manufacturing

Premium food and wine from our clean environment – achieving carbon neutrality

through investment in renewable energy infrastructure will enhance SA’s global premium

food and wine status

Safe communities and neighbourhoods – ‘green’ and energy-efficient communities

support healthy and active lifestyles. This project also assists to mitigate against major

storms

Every change for every child – providing cost effective and reliable energy will improve

affordability and liveability of regional SA, specifically the Berri Barmera Council region.

Realising the benefits of the mining boom – creating affordable energy for expanded

electricity transmission and new generation infrastructure in the mining sector; support

the global promotion that SA is a competitive location for investment in energy

development and production

Ten Economic Priorities

This project will deliver on many of the SA’s ten economic priorities including:

Unlocking our resources – the SA government has a clear directive to invest in

renewable energy resources, the Berri Renewable Energy Solar Power Generation

Facility will create nearly 200 jobs in regional SA

Best place to do business – carbon neutrality and cost effective and reliable utilities

will attract business investment

Opening doors for small business – carbon neutrality and cost effective and reliable

utilities will attract and support regional small business

International connections - carbon neutrality and cost effective and reliable utilities will

attract global investment



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Destination of choice – contributing to the world’s first carbon neutral city will increase

tourism in metropolitan and rural SA

Premium food and wine exported to the world – improved roads will facilitate safer

connection and increased accessibility between primary production, processing centres

and linkages to major transport centres – ports and rail networks

A destination of choice for travelers – direct link to Sturt Highway – main route

between Adelaide to Sydney

Growth through innovation – supporting innovation through new and emerging

renewal energy technologies and investment

The knowledge state – building the local knowledge base for smart, renewable

technologies that delivers strong economic growth and creates jobs

SA Strategic Plan Key Drivers and Target

The Berri Renewable Energy Solar Power Generation Facility aligns with the SA Strategic Plan

Key Drivers and Targets:

Prosperity

Vision: A strong, sustainable economy that builds on our strengths

Goal: We develop and maintain a sustainable mix of industries across the state.

Target 40 Food Industry- Grow the contribution made by the South Australian food



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industry to $20billion by 2020.

Target 66 Emissions intensity- Limit the carbon intensity of total South Australian

electricity generation to 0.5 tonnes of CO2/MWh by 2020.

Comment: the Solar Power Generation Facility will support major businesses involved in food

and wine production in the Riverland. The generation of renewable energy from the Facility will

provide stable and affordable power over long term business cycles allowing predictable growth

and expansion and contributing to the State’s goal to minimise carbon intensity associated with

electricity generation.

Vision We have a skilled and sustainable workforce.

Goal All South Australians have job opportunities

Target 47 increase employment by 2 % each year from 2010 to 2016

Comment: Food and wine industries provide for a large percentage of local job opportunities in

the Riverland. The Solar Power Generation Facility provides for long term stability for power

costs to CIT and Accolade Wines and as such supports sustainable jobs growth in the district.

Environment

Vision South Australians think globally, act locally and are international leaders in

addressing climate change.

Goal We reduce our greenhouse emissions.

Target 59 Greenhouse gas emissions reduction - Achieve the Kyoto target by limiting the

state's greenhouse gas emissions to 108% of 1990 levels during 2008-2012, as a first

step towards reducing emissions by 60% (to 40% of 1990 levels) by 2050

Target 64 Renewable energy - Support the development of renewable energy so that it

comprises 33% of the state's electricity production by 2020 (Milestone of 20% by 2014)

Target 66 Emissions intensity - Limit the carbon intensity of total South Australian

electricity generation to 0.5 tonnes of CO2/MWh by 2020

Goal South Australia has reliable and sustainable energy sources, where renewable

energy powers our homes, transport and workplaces.

Target 64 and 66 as previously mentioned.



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Comment: the 10 MW Solar Power Generation Facility assists in addressing the challenges

associated with climate change through dedicated renewable energy generation to meet the

demands of local large scale customers. The Facility will contribute to the State’s target of 33%

of electricity generation being from renewable resources by the year 2020.

Planning Strategy for South Australia

The Murray and Mallee Regional Plan outlines the State Government’s directions for land-use

change and development in South Australia. Relevant planning directions of this document have

been incorporated into the Berri Barmera Development Plan.

The Berri Renewable Energy Solar Power Generation Facility delivers on key issues identified

in the Regional Plan:

Economic development – encouraging the development of alternative energy

industries i.e. solar power; attracting industry to the region where there is infrastructure

capacity for growth i.e. electricity

Infrastructure and service provision – expanding the local generation of electricity

through solar, wind farms and peaking plants to increase capacity for economic activity;

providing strategic electricity infrastructure corridors for augmentation and extension of

the transmission network

Population and settlements – providing greater employment, recreation and other

opportunities to retain young people – achieve through job creation from the solar power

generation facility

Berri Barmera Council has considered all updates and amendments to the South Australian

Planning Strategy. The Berri Barmera Development Plan (see above) is consistent with the SA

Planning Strategy through ongoing review and preparing strategic directions reports. As a

result, the Berri Renewable Energy Solar Power Generation Facility leverages and delivers on

both the SA Planning Strategy and Berri Barmera Council Development Plan.



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Strategic Infrastructure Plan for SA (update)

The Berri Renewable Energy Solar Power Generation Facility delivers on the strategic priorities

in the SA Infrastructure Plan for the following:

1. Energy sector:

Electricity generation and the supply/demand balance - maintain a reliable,

secure and competitively priced supply of electricity in a carbon constrained

economy.

Electricity transmission and distribution networks - facilitate greater

interconnectivity of electricity transmission networks to increase system security

and reliability and increase exports of South Australian renewable energy

Climate change - foster research and development and fast take-up of

technological advances in renewable energy supply and use; promote the

development of market and regulatory arrangements that encourage energy

industry developments that minimise growth in greenhouse gas emissions

Managing demand - Promote the adoption of demand-side measures that

contribute to more efficient energy use and improve use of existing infrastructure

Energy market development and reform - Promote the development of national

policy and regulatory arrangements for energy markets that ensure that South

Australia secures access to reliable, sustainable and affordable supplies of

energy; contribute to national energy reforms that will support the timely

development of transmission infrastructure and equitable cost allocations.

2. Minerals and energy resources sector - Upgrade the electricity transmission network to

accommodate investment in renewable energy generation.

The Berri Renewable Energy Solar Power Generation Facility delivers on the strategic priorities

in the SA Infrastructure Plan – Regional Overview Murray and Mallee:

electricity extension and augmentation for new areas of agriculture, horticulture, mining

and processing can require long lead times.

Renewable energy exploration/ development activities are occurring across the region -

geothermal, wind and solar energy sources are all being considered.



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Ensure that infrastructure upgrades support diversification of the region’s economic

base.

Integrated Transport and Land Use Plan

This Berri Renewable Energy Solar Power Generation Facility will be located close to the Sturt

Highway. The improvements to the regional road network identified in above Plan will support

the project’s outcomes of economic diversification, business development and jobs growth.



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Stakeholder Engagement

Accolade Wines are supportive of strategies which underpin predictability of power costs whilst

assuming more control over risks associated with supply reliability. Accolade strongly support

the construction of the Solar Generation Facility – see attached letter of support.

For CIT, the embedded generation offered through the Berri Renewable Energy Solar Power

Generation Facility can reduce and stabilise local power costs for irrigation charges by CIT to

regional producers. CIT strongly support the construction of the Solar Generation Facility – see

attached letter of support.

The Berri community fully support the solar farm – see attached letters of support. As required

by Section 48 (2) d of the Act, a formal public consultation process will occur prior to the

schedule of works. This will take around 2 months.



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The Case for Investment

Overview

Recently there has been significant increases and volatility in power costs to key Riverland local

businesses including those with high energy needs. Economic diversification and development

in the Riverland is constrained by the cost and unreliability of power to grow existing business

and attract new business. The project is being driven by localised need for affordable power to

users with high load requirements to support business, local economic growth and stability of

the Riverland region.

Berri Barmera Council will construct the Berri Renewable Energy Solar Power Generation

Facility with an initial capacity to generate up to 10 MW for local distribution and grid connection.

The development will use solar photovoltaic technology with both local ‘behind the meter’

connection to industrial and commercial customers and grid connection to the Berri substation

located close to the Solar Power development site.

The project will assist in building a business environment that supports employment creation

and retention and growth associated with agriculture and wine production with representative

key sectors of the local economy. Both intended ‘direct connect’ customers Accolade Wines and

Central Irrigation Trust (CIT) are large scale employers of local people, purchasers of local

services and goods and are significant project partners in the Solar Power Generation Facility.



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Berri Barmera Council will to establish formal agreements for purchase of generated power from

Accolade Wines and CIT.

The potential impact of the Solar Power Generation Facility upon the local economy through

direct investment and multiplier effects is very significant. Financial modelling has been

completed of the Facility and demonstrates that the project is feasible – see Attachment 1.

Background

Geographically, the location for the Berri Renewable Energy Solar Power Generation Facility is

ideal for both solar load and the transmission of electricity. The proposed site for the Facility is

located near the ElectraNet/SA Power Networks 132/33 kV substations in Berri North.

Solar Power Generation Facility and had previously been considered by a private entity for a

grid connected solar farm. Changes in Federal Government policy and market conditions have

held back progress of the site being developed for a small-scale grid connected solar farm.

However, in recent years there has been significant increases and volatility in power costs to

key local businesses including those with high energy needs. Subsequent investigations have

demonstrated that embedded local solar generation can be supplied to these customers at a

cost that is competitive with market based supply through the retail market or spot market.

Berri Barmera Council is developing the project in collaboration with Accolade Wines and CIT.

The infrastructure developed will remain in the ownership of Berri Barmera Council. The



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purchase of power from the site will be subject separate contracts (Power Purchase

Agreements) with end users. Through PPA, stability in power costs can be guaranteed for these

businesses and provide a level of certainty desired for ongoing financial management and future

investment.

Accolade Wines has a growth strategy which includes additional investment in their Berri plant

to service growing export markets, including the developing increase in demand from China for

Australian bottled table wines. The company’s decision to consolidate its investment in the Berri

district indicates likely generation of local employment opportunities especially for younger

residents looking for long term career opportunities and stable employment. However, power

costs associated with the Berri operations are a substantial component of overall production

costs and the unpredictability of these costs impact upon future growth plans and additional

investment in local employment. Critical production components such as refrigeration and 24

hour shifts require a high level of reliability in respect to power supply. Accolade Wines are

supportive of strategies which underpin predictability of power costs whilst assuming more

control over risks associated with supply reliability.

For CIT, a similar story exists in that there is a power charge component for supply of CIT water

that is passed onto end users. This charge has risen significantly in recent years and has a very

strong impact on grower capacity to manage existing businesses successfully, let alone

consider expansion and providing additional employment opportunities to local community.

‘….power generation charges have now doubled in the 2015/2016 financial year….Immediately

after the announcement of the closure of Northern Power Station in Port Augusta we saw the

price of generated power double. CIT is looking at ways to minimise this impact but there are

very few options.’ (CIT Chairman 2016)

The embedded generation offered through the Berri Renewable Energy Solar Power Generation

Facility is one such option that can reduce and stabilise local power costs as a component of

irrigation charges by CIT to regional producers.



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Regulatory Review

Council have engaged CQ Partners to conduct a Regulatory Review of the Berri Renewable

Energy Solar Power Generation Facility – see Attachment 4 for an overview. CQ Partners are a

market advisory company specializing in providing advice, services and structured products to

achieve commercial solutions in the electricity, gas, carbon, renewable and fuel markets. The

Review will be completed prior to project commencement.

CQ Partners have produced the financial modelling and will provide regulatory advice including:

AER retail application

Austraclear account set up

Prudentials – via financial institution and lodgement with AEMO

AEMO application to become a market customer

Any applicable licences through ESCOSA

B2B systems to support AER application (settlements, risk management framework,

meter reading etc)

AER application focuses on key areas including capability, financials, systems and

resources.

Where necessary assist Council in these areas

PPA structure and implementation

Implementation of retailing business and risk mitigation

Clutch will provide advice on transmission infrastructure and connection to the grid including

negotiations with SA Power Networks and Electranet. May Brothers will provide project

management for the construction of the solar array and other infrastructure. Yates Electrical

Services – Have provided a quotation for the construction of the solar array to the point the

energy leaves the site.

Council will specialist resources and energy legal services for the Power Purchasing Agreement

from a panel of suitable firms.



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Objectives/Benefits/Outputs

What is the gap or need which the proposed project is seeking to fill?

The two main needs this project will address are:

1. Accelerating regional economic growth

2. Cost effective and reliable power supply

Economic Growth

Access to transport, telecommunications, power, gas, and water networks are critical inputs for

business as they undertake productive activities, expand, and create jobs. Investments in

electricity produce long-term economic growth rates and are positively correlated with job

growth4. Energy plays a fundamental part in the economic growth process. An international

literature review confirms a positive correlation between energy use and economic growth5.

Funding through the SLGIP will accelerate this project providing an immediate economic

stimulus through construction and job creation. More than 50 flow on and indirect jobs in

regional industries will result from this project. Specifically, economic benefits include6:

Employment

Gross value added – labour, goods and materials sources locally

Skills – providing skills for local workers providing the foundation to support future solar

projects in the region and state

Long term economic growth strategy – contribute to diversifying the economy and build

local skills

Supply chain development – Australian manufacturing of tracker systems, power cables,

switch gears and construction and installation of plants

A significant benefit of the Berri Renewable Energy Solar Power Generation Facility will be

through 5.5 km of transmission cabling, Accolade Wines and CIT in Glossop can access power

4 http://www.ifc.org/wps/wcm/connect/83affa004f7ce00bb812fe0098cb14b9/chapter6.pdf?MOD=AJPERES 5 CDC Group (2016) What are the links between power, economic growth and job creation? Development Impact

Evaluation, Evidence Review. 6 AECOM Australia Pty Ltd (2010) Economic Benefits from Solar Flagship Project. BP Solar/FRV Consortium



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behind the meter. This increases the returns for the Facility and delivers greater benefits and

reliability of power to these companies.

This project is scaleable and would allow for a larger array if the power consumption increases

or batteries become a more viable storage option.

Job creation

As a source of energy, solar power is a job-creating powerhouse. Money invested in solar

power creates two to three times more jobs than money invested in coal or natural gas7. A solar

farm will bring significant and sustained economic benefits to one of South Australia’s most

disadvantaged communities, the Riverland.

The economic benefits of developing large-scale solar farms extends beyond the boundary of

the project into the wider community. Economic analysis on other solar farms have been used to

determine the economic value of the Berri Solar Power Generation Facility8 which will create

132 full time jobs during construction and 3 full time positions during the operation of the plant.

More than 50 flow on and indirect jobs in regional industries will result from this project.

Reliable Power Supply

Solar energy is a renewable free source of energy that is sustainable and totally inexhaustible,

unlike fossil fuels that are finite. It is also a non-polluting source of energy and it does not emit

any greenhouse gases when producing electricity. Berri Renewable Energy Solar Power

Generation Facility will provide an affordable and reliable energy source for local business and

the community. The Facility will also secure a sustainable and independent energy future for the

Riverland community. Berri’s business sector and the community will no longer be reliant on un-

renewable energy suppliers from outside South Australia or unnecessary policy directives from

large multi-national companies for load sheading in peak periods.

7 costofsolar.com/solar-power-advantages-and-disadvantages/ 8 Mount Remarkable Study 2013. Based on 11 construction jobs/MW and 0.3ongoing jobs/MW



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Environmental benefits of the Solar Power Generation Facility upgrade include:

Reduces the effects of global warming

Reduces carbon emissions

Noise reduction

Renewable energy source

Minimum reliance on land, water and hazardous materials

Project beneficiaries

The Berri Council, community and business sector will be the beneficiaries of the project. In the

immediate term, Council has secured two direct connect customers who are large scale

employers of local people and purchasers of local goods and services. Accolade and CIT will

purchase energy from the Solar Power Generation Facility and funds will be used for These

funds will be used to offset construction costs of the Facility and be used for community benefit.

Accolade Wines

Accolade Wines is the number one wine company in Australia and the UK by volume, and the

fifth largest wine company in the world. Headquartered in Australia, Accolade Wines delivers

approximately 38 million cases to more than 140 countries annually; including Australia, the UK,

Mainland Europe, the US, Canada, Japan, New Zealand and China.



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Central Irrigation Trust

Central Irrigation Trust which is situated in Barmera, pumps water from the River Murray

through large diameter pipeline systems to 1,600 growers who irrigate 14,000 hectares of

horticultural crops in 12 Private Irrigation Districts in the Riverland Region of South Australia -

Berri, Cadell, Chaffey, Cobdogla, Kingston, Loxton, Moorook, Mypolonga, Waikerie, Lyrup,

Golden Heights and Sunlands.

This project will be in no competition with private business or other public services. The Solar

Power Generation Facility will provide an alternative, cost-effective and reliable energy source.

This will enable economic diversification through growth of existing businesses, attracting new

business and jobs growth in the region.

If applicable, provide information about the extent of any direct private benefit from the project

and ICT expenditure involved (refer Guidelines P.5)

NA.

Estimate the direct employment impacts, during the construction phase and, if any, ongoing

once the project is completed.


and 3 full time positions during the operation of the plant.

Estimate any indirect employment impacts.

Due to increased operating capacity, more than 50 new jobs will occur in Accolade Wines and

CIT from this project. Additional indirect employment due to other business growth and new

business entries may account for another 10-20 jobs.

9 Mount Remarkable Study 2013. Based on 11 construction jobs/MW and 0.3ongoing

jobs/MW

http://www.cit.org.au:84/Home/downloads/Friction%20Testing%20Logger%20Data.zip



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What is the expected contribution of the project to the local economy or nearby business

(section 48 (2) (c) of the Act)

A financial modelling process was completed for the Berri Solar Power Generation Facility. The

positive net present value (NPV) with a high IRR (11.61%) means that the investment is

beneficial – see Attachment 3.

Options Analysis

Outline any alternative options for meeting the need identified and why the proposed project is

the preferred solution.

Berri Barmera Council are a leader in environmental and natural resource management and

supporting a growing economy in the region. In analysing alternative options to the current one-

dimensional and unreliable power supply and escalating energy costs to consumers, Council

have completed an analysis of viable and alternative energy options.

The State Government’s focus on renewable energy, low carbon generation investment and

development of alternative energy industries in the Mid Murray and Riverland region was

considered in Council’s energy analysis process. Council also considered the independent

financial modelling completed of the Solar Power Generation Facility determined a positive net

present value (NPV) with a high IRR (11.61%) meaning that the investment is beneficial.

Berri Barmera Council have completed a risk assessment of this project. The result being that a

Solar Power Generation Facility option including size (10 MW) and type (solar photovoltaic

modules with trackers) is the most prudent, effective and efficient solution to affordable

provision of power to users with high load requirements. This option supports the business and

local economic growth and stability of the Riverland.



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Project Management

Project delivery arrangements

Project Delivery

Council have assessed whether a formal Prudential Management Report is required for this

project, as outlined in the Act. As the total project cost is in excess of $4M, Council will conduct

a Prudential Review prior to project commencement. Informing the Prudential Review will be the

outcomes of the Feasibility Study – Attachment 4. Other documents to support the project

delivery approach include Attachment 2 for Risk Assessment and Management Plan and

Attachment 5, Project Delivery Timetable.

How will Council staff and external contractors be involved?

Council staff have a strong background in project and financial management and have

experience in managing many infrastructure projects to standard, on time and within budget.

Council staff manage more than $200M of infrastructure assets on an annual basis. Recent

projects include:

Riverland Regional Innovation and Sports Precinct - $7M

Berri boat ramp - $320 000

Berri Stormwater recycling scheme - $900 000

Council’s Director of Infrastructure will liaise with the successful construction company who will

manage the delivery of the Solar Power Generation Facility.

Berri Barmera Council business aligns with the legislative guidelines of the Local Government

Act 1999. Chapter 4, parts 3 and 4 of the Act outlines the prudential requirements and contracts

and tender policies for SA Councils. In preparing the Risk Management Plan, Attachment 2 for

this project Council has determined that the management and delivery approach is the most

appropriate for carrying out the project.


and 3 full time positions during the operation of the plant. Due to increased operating capacity,

10 Mount Remarkable Study 2013. Based on 11 construction jobs/MW and 0.3ongoing jobs/MW



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more than 50 new jobs will occur in Accolade Wines and CIT from this project. Additional

indirect employment due to other business growth and new business entries may account for

another 10-20 jobs.

How will Council seek to maximise use of local contractors/consistency with the SA Government

Industry Participation Policy?

Berri Barmera Council supports and adheres to the South Australian Industry Participation

Policy (IPP). Council aligns with Part 4 Contracts and tenders policies of the LGA Act (1999)

and where possible, use local, regional or SA-based competitive businesses employing South

Australians to deliver works for Council. If relevant, Council will select contractors that use

Australian Steel products.

In developing tender documents, Council will ensure that the successful contractors will

demonstrate they have maximised employment opportunities for SA residents and use local

businesses for contract opportunities.



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Project Management Capacity

Relevant Council Staff Experience and Capacity

Berri Barmera Council staff will contract a separate project manager of oversee the construction

of this project. To support sound project management principles, Council has prepared a risk

management plan for the project – Attachment 2.

Council’s Director of Infrastructure, Myles Somers will oversee the project management– see

below for a statement on his capacity and experience. Additional Council staff will assist the

project manager and include the CEO, the Executive Management Team, HR, finance and

administrative staff. An additional 85 hours in staff time has been estimated over the 18-month

project duration.

Myles Somers is the Manager Environmental Services and Major Projects and is a Registered

Planner with an extensive career in both Local Government and in the private sector working in

the Energy development industry. He holds qualifications in Environmental Health, Economics

and Urban Planning and is a Member of both the Australian Institute of Project Management

and the Planning Institute of Australia. He leads a number of major projects for Council and

manages a team delivering statutory legislation services in Planning, Building, Environmental

Health, Property Management and Local laws. His previous position prior to joining Berri

Barmera Council in 2015 was with ElectraNet the South Australian Electricity Transmission

Network Provider as Manager of Planning Approvals. During his 10-year tenure with ElectraNet

he was a core member of project team delivering complex high value projects such as power

line, substation and private sector energy developments. He has a vast network of contacts with

access to specialist support for major project delivery.

David Beaton is the Chief Executive Officer for Berri Barmera Council and will be the

nominated Project Manager within Council. He has a strong background in leadership and

management and has overseen many of Council's infrastructure projects over the past 5 years.

David has led improvements in Council’s financial performance and community support. He has

been able to attract federal funding to secure improvements in water use and reuse efficiency

and long term aspirational community goals. David has established community led groups in

Berri and Barmera to assist Council in town developments and environmental sustainability.

David seeks methods and partnerships that maximise community benefit.



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Karyn Burton is the Manager of Corporate Services of the Berri Barmera Council, Karyn holds

a Master of Commerce in Professional Accounting. She has over 27 years’ experience in Local

Government undertaking various roles within the corporate business units of Council. Karyn

uses her comprehensive accounting and financial management skills to manage all financial

aspects of the Council and associated staff. Karyn has used effective time management and

organisational skill to provide a proven track record of meeting targets. She applies leadership

and managerial skill throughout the organisation.

Project Evaluation

Monitoring, evaluation and reporting is the way that the government and Berri Barmera Council

will know that the objectives and expectations are being achieved, both with the construction of

the project, and the ongoing benefits into the future.

Project reporting for construction will occur in line with the agreed funding deed and milestones.

Longer term reporting on outcomes will occur through the Council’s reporting process using the

logical connection between the completed project and the intended results. A comprehensive

project final report will provide details of the outcomes achieved.

Measurable indicators can identify progress towards achieving project objectives:

Accelerating regional economic growth

Cost effective and reliable power supply

A range of measures will determine project achievements and include:

1. Local economic data analysis

2. Energy output data of Solar Power Generation Facility

3. Review local and regional employment figures pre and post project

4. Consultation/survey post project with community, Council staff, project management

company

5. Analysis and review of project management approach

6. Financial reporting and analysis, six-monthly

7. Reporting against risk management plan, six monthly



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Indicators may include both activities and outcomes such as a measurable improvement in job

creation and economic development.

A quarterly Project Status Report will be completed for the project outlining;

Key deliverables and milestones

Major activity /deliverable behind schedule

Accomplishments

Next major activities

Major issues and risks

Financials

Change requests



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Project Funding

Income

3. Council financial commitment $20.136M

4. Partnership Funding from SLGIP $5.034M

Total Project Costs $25.17

Expenditure

A detailed expenditure plan should be provided. See Attachment 5 for costed schedule

of works and delivery timetable.

Independent costs are provided in Attachment 6

Council’s Long Term Financial Plan is provided in Attachment 7

Attachment 8 are letters of support.

Wider and longer-term impact

Berri Barmera Council’s LTFP demonstrates Council’s financial sustainability over the ten-year

term of the plan. The plan incorporates maintenance funds for capital upgrades over the long

term. One of the advantages of a Solar Power Generation Facility is their relatively low

maintenance costs and the anticipated ongoing costs for the Facility are reflected in the asset

maintenance plan. Council will include the solar farm infrastructure in their asset register and

initiate an appropriate maintenance and upgrade schedule into the future as part of Council’s

Long Term Financial Plan.

Council can confirm that the project will be in addition to any existing expenditure committed for

the next 2 years. Costs for the Solar Power Generation Facility are reflected in the revised

capital expenditure figures outlined in the application.



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Solar Power Generation Facility BUSINESS CASE

Documents

Transcript of Solar Power Generation Facility BUSINESS CASE