News

RES just announced its acquisition of infrastructure asset management business Blueshore, which has 1.6 GW of assets under management, to more than double its asset management portfolio in Australia to over 3 GW. In addition to its asset management division, RES continues to progress its portfolio of projects under development with around 5 GW wind, solar and storage development pipeline across the NEM and WEM markets in Australia, and operations & maintenance services. AltEnergy cornered Grant Harris, RES’ Director of Asset Management, Asia Pacific, to find out more about the Blueshore deal, RES Australia’s growth, and the outlook for the large-scale renewable energy industry.

Can you tell us a bit more about the Blueshore acquisition please Grant, and the rationale behind it?

RES is looking to grow its Support Services business organically and through acquisition as we look to broaden and enhance the services we provide to our clients. The biggest rationale behind the acquisition is the team at Blueshore who are both passionate and experienced plus share the same family culture and values as people at RES.

Does the Blueshore deal signal a new level of maturity in the Australian renewable energy industry, with an increasing number of completed, generating projects coming on line?

The renewables market in Australia is certainly reaching a new level of maturity. Owners of utility scale solar, wind and storage projects have gone through a learning curve on operating projects over the last couple of years in a very complicated and challenging operating environment. The value that companies like RES and Blueshore offer to asset owners is being recognised and we are well positioned to support our clients as we proactively prepare for future changes to the operating environment and ensure we secure value for our clients by staying ahead of the curve.  

For those of us who might not fully understand, can you explain what the usual activities of a large-scale solar and wind farm asset management company involve?

Many of our clients are large funds who utilise RES’ experience to provide full management of the project SPV company. The full service is a very wide ranging set of activities and we would typically oversee all compliance, financial and technical aspects of the project. This can include financial management, company secretary, business planning, management of contract obligations, day to day management of contractors, management of regulatory compliance including energy markets, development approvals, technical compliance with the GPS, grid and network obligation. Additionally we would have oversight of Health and Safety on Site and could also be engaged to manage community and stakeholder engagement. We offer comprehensive reporting on project performance on a monthly, quarterly and annual basis to meet client and lender requirements. Often RES would take on a project at the beginning of construction and would manage the build of the project under the EPC contract and then post Practical Completion into normal operations, also taking on full management of defects, punch lists and supervising EPC performance testing.

RES can also provide enhanced performance optimisation services deep diving into performance at an individual turbine or inverter level (e.g. Inverter digital twins, condition monitoring of drive train components, monitoring turbine performance to power curve). This can be delivered as part of our asset management service or alternatively as a standalone service to clients with third party asset managers or who self-perform asset management.

RES can provide 24/7 365 monitoring of the plant via our global control centre operation based in Glasgow and Sydney.

RES also has extensive experience of management of large portfolios of projects providing full oversight, management and optimisation / value enhancement services across the whole portfolio.

What is RES’s 1% Club?

In the past RES has been certified as delivering one percent more availability than the average in the market. That can be significant over a 25-year investment period.

So between the full project life cycle services RES is offering – development, O&M and asset management – your Australian team must be growing?

We now have offices in Sydney, Melbourne and Brisbane, along with regionally based team members. RES has over 100 team members in Australia working across the project life cycle, and in support services.

What is your own personal background and experience in the Australian renewable energy industry?

I have been working in renewable energy and low carbon technology since 2007.

Prior to this role, I was the Commercial Director at RES in Australia for 5 years, responsible for setting and delivering our wind, solar and energy storge business objectives, with a focus on leading M&A activity, delivering offtake solutions and securing equity investment and debt financing for our projects. Prior to this I worked for RES in the UK helping the business set up a listed fund for 17 of our operating assets and diversity into new markets. Prior to RES I worked in the low carbon innovation sector, through a consultancy and a broking capacity.

What do you think are some of the key grid, regulatory and market issues to keep an eye on this year?

2022 is going to be a massive year:

AER compliance

• AER have advised in their enforcement update that generator compliance with dispatch instructions is in their top 5 priorities for 2021-2022. We will be paying close attention to monitoring dispatch compliance and solving any problems as they may arise.
• AER have also initiated consultation with generators in regards to GPS compliance systems, policies and procedures. We participate where required on behalf of our clients.

Auto-bidders

• We are interested in the increasing uptake of auto-bidding software in the market. In combination with the 5MS rule change in October last year and increasing amount of storage, the response time of participants is generally shortening. This will be worth keeping a close eye on.

Primary Frequency Response Incentive Arrangements – rule change

• This rule change aims to incentivise behaviour of generators which stabilises frequency. It stems from the Mandatory Primary Frequency Response rule change.
• Likely to include significant changes to the causer-pays process, which will affect our clients.

Capacity Mechanism and Congestion Management Mechanism

• The ESB is tasked with formulating a rule change and consultation process by end of 2022.

Connection Reform Initiative

• The Connections Reform Initiative is working on a range of solutions to address the systemic concerns involving all parties in the connection process. It is vital that improvements are made to the connections process to ensure that the system can safely and securely take on the high number of large-scale renewable energy projects that are and will continue to register to connect to Australia’s power systems.

Integrating Energy Storage Rule Change

• The AEMC finalised its rule change for integrating energy storage into the NEM
• Storage and hybrid systems will be able to register as an Integrated Resource Provider instead of under two different categories
• GPS compliance can be assessed separately for each technology type but aggregated at the connection point, this will help simplify storage retrofits
• Existing hybrid and storage facilities will need to re-register under the new rules from 2024 but the GPS will not be reopened
• TUOS fees still need to be negotiated with TNSPs and will not be waived as a default position

 ESB Congestion Management Model

• The ESB are undertaking the design of a Congestion Management Model throughout 2022
• The model seeks to address issues associated with unmitigated generator curtailment and uneconomic dispatch associated with disorderly bidding
• There is a significant opportunity for the industry to work with the ESB on the design process, RES are engaged in the working group

 State led development of REZs

• The connection framework and risk exposure is diverging significantly between states
• It is increasingly important for developers and investors to understand the risks and opportunities associated with a wide variety of REZ development models being progressed by NSW, Queensland and Victoria