News

It’s been almost 12 months since Sweden-headquartered OX2 made its first acquisition outside Europe, buying Australian renewables developer ESCO Pacific. As part of the deal OX2 took control of the assets of one of Australia’s most active solar farm developers, seeing “great potential in the Australian market for renewables and opportunities to expand the operations of ESCO Pacific.” After consolidating its new Australian operations, OX2 has quietly been going about its business here. AltEnergy caught up with Country Manager Rachel Watson to check on OX2’s progress so far in Australia, and find out what we can expect in the future.

1. Q: Rachel, can you give us a brief overview of what’s been happening at OX2 Australia in the almost 12 months since OX2 acquired ESCO Pacific?

RW: It’s been a big 12 months!  Our areas of focus broadly fall under three headings: people, projects, and processes.  We have been building out the team to add capability to scale up the business, bringing on more development and engineering capacity as well as firepower in the transactions team.  We have also established a construction team so we can expand our offering to investors to include construction management.  The ESCO Pacific project pipeline OX2 acquired has a number of projects ready for the final push to financial close, so we have been working hard on those projects.  Elsewhere, we have been looking for ways to add value to the existing projects, for example, by adding battery storage, by changing the size of the project or by developing a construction solution.  While all this has been happening, we have also been merging the ESCO Pacific business into OX2’s world, which has meant quite a lot of change for everyone.

2. Q: In December an agreement was made between Google, AirTrunk and OX2 for a long-term Power Purchase Agreement to support the development of a new 25 MW solar farm in the Riverina district of New South Wales (to be developed by OX2) – what is the latest update with this project?

RW: We are closing out final development issues in preparation for having construction commence shortly.

3. Q: Can we expect to see progress with any other of OX2’s development projects in the short to mid term, and anything in particular to keep an eye on?

RW: We have been making good progress across the project pipeline. For example, in the last 10 months, we have received 5.3.4A letters enabling connections to proceed on three projects (two in Victoria and one in New South Wales).  We have also lodged two major development applications for projects in NSW and closed out a number of other development items on late-stage projects.  We continue to focus our efforts on getting some projects through to financial close in 2024.

4. Q: OX2’s recently released annual report mentions “great potential in increasing the product range to include the sale of turnkey projects, expanding through project acquisitions and adding onshore wind power to the business.” Is there anything more specific you can tell us about in relation to project sales, acquisitions and additions at this stage Rachel?

RW: Selling projects is our business, and we are always looking for ways to add value to projects in our pipeline and projects that we might acquire.  Our focus in growing the pipeline is on onshore wind, as that is OX2’s main business in Europe.  We are looking at some very interesting, early stage onshore wind prospects at the moment.

5. Q: The annual report also mentions OX2 is evaluating offshore wind power and hydrogen projects in Australia. Can you share any more details about these?

RW: We are in the early stages of evaluating these opportunities in Australia.  OX2 has had recent success in securing permits for offshore wind developments in Europe and in finding partners for offshore projects so we will continue to search for the right opportunity in Australia. 

6. Q: At the time of the ESCO Pacific acquisition OX2 said it saw “great potential in the Australian market for renewables”. Do you think we currently have the right federal and state government policy settings and market settings to help achieve this potential?

RW: There is no doubt that Australia is a leading renewable energy market, with projects at a scale that isn’t achievable in many other countries and great renewable energy resources.  However, we have been on a long journey with many twists and turns along the way, and there is always room for improvement.  The CIS is a good example.  It is tangible evidence of the federal government’s commitment to achieving our 2030 target, and at the same time it has contributed uncertainty to the market which might cause some hesitation among investors while the impact of the CIS becomes clearer.  If this intervention can accelerate projects reaching financial close, and perhaps provide support for projects that would otherwise not be built, then it will be very worthwhile.  If it simply results in projects that would have been built anyway having another commercialisation option available, then it might not be accelerating our progress to our targets.  Whatever the result, we can’t simply set and forget any of these policy initiatives, and governments and industry will need to be in constant dialogue about what is working and what might need change.

7. Q: Any reaction to the federal government’s recently announced “Future Made in Australia Act”?

RW: Support for securing our supply chains and developing expertise within Australia is always welcome and needs to be done thoughtfully.  We absolutely need to focus efforts on industries where we can be competitive and where Australia has a strategic advantage.  We have a good track record of coming up with new technology and technological advancement, so there should be initiatives worthy of this support.  If the “Future Made in Australia Act” provides an incentive for those pockets of innovation and competitiveness to be brought into the light and fostered to scale, then it has great potential to support the development of renewable energy.

8. Q: Do you have any opinion either way about the nuclear energy option for Australia?

RW: The prize is to get as much renewable energy into our system as possible.  Renewable energy is the solution for the here and now, and with most of our coal generation closing by 2035, we don’t have any time to waste.  It makes no sense to me to divert efforts away to a technology for which we are completely unprepared, and which will be more than a decade away in coming to fruition.