Australia’s Solar Portfolio Sale May Include Battery Storage
The owner of a significant collection of solar projects focused on utility sales is optimistic about finalising a sales agreement this year. However, the company has indicated that it may consider incorporating battery storage to enhance their earnings potential.
Metlen, the Greek-based energy and industrial powerhouse previously known as Mytilineos, has been actively marketing its operational Australian solar farms and development pipeline since enlisting Macquarie as an advisor in mid-2024. Despite ongoing efforts, the firm has not yet found a buyer.
Expectations for Sale Completion
During a recent earnings call with analysts, Metlen reaffirmed its anticipation of completing the sale of its portfolio, alongside assets in Spain, by 2026. CEO Christos Gavalas addressed an analyst’s inquiry regarding the company’s strategy for asset rotation in countries such as Australia, Chile, and Spain, highlighting the integration of battery storage at its solar sites in Chile.
“Chile has been a turning point for us. We have hybridised our approach,” Gavalas explained. “By adding batteries alongside solar, we are addressing the global challenges facing solar energy and tackling zero pricing issues.”
He added, “This hybrid model is the way forward, which is why we are so committed to promoting the green energy transition through batteries and storage solutions.” Gavalas expressed confidence that Australia and Spain would also adopt this hybrid approach, contributing to higher margins, better Power Purchase Agreements (PPAs), and improved profitability, thereby addressing fundamental issues within the sector.
Portfolio Overview
Metlen boasts a total of 527 megawatts (MW) of operational assets in Australia, its largest portfolio in any country, alongside approximately 183 MW of projects ready for construction and an additional 345 MW in advanced stages of development.
Although this Australian portfolio is substantial, the company disclosed minimal additional details in its annual report, only noting a €36.2 million gain last year attributed to adjustments in the fair value of virtual Power Purchase Agreement contracts, predominantly associated with its Australian assets.
Recent Developments and Market Challenges
In the previous year, Metlen announced the refinancing of seven solar farms located in New South Wales and Queensland, which include Corowa (40 MW), Junee (40 MW), Wagga (64 MW), Wyalong (75 MW), Moura (110 MW), Kingaroy (53 MW), and the soon-to-be-completed 150 MW Munna Creek solar farm.
Solar farms have faced challenges in terms of earnings due to the reduction of wholesale electricity prices during peak sunlight hours, as many of these projects are often curtailed when prices turn negative. The trend has led to a significant decline in the construction of standalone solar projects in Australia. Instead, the preference has shifted toward solar-battery hybrids, where solar farms are combined with large batteries to store excess energy for profit during more lucrative evening demand peaks.
