Sun Cable’s Singapore power retailer folds

by | Oct 22, 2021 | Business | 0 comments

The multi-billion-dollar Sun Cable project to power Darwin and Singapore from a massive solar farm in Tennant Creek has suffered a blow after a Singapore-based independent electricity retailer, that earlier pledged to be a buyer of the solar energy, exited the retail electricity market – along with four other retailers.

In March 2021, iSwitch Energy, one of the city-state’s top three retailers and its largest green retailer, had pledged its support to be a foundation off-taker for the solar energy to be produced by the proposed Sun Cable project.

The $30 billion megaproject is set to source 10GW of solar energy from Tennant Creek and deliver it to Singapore via a 3,750km undersea High Voltage Direct Current (HVDC) cable.

Backed by Australian billionaires Andrew “Twiggy” Forrest and Mike Cannon-Brookes, Sun Cable plans to supply a fifth of Singapore’s power needs – to reduce the nation’s reliance on imported LNG (liquefied natural gas).

“iSwitch fully supports this ambitious project and looks forward to celebrating a power purchase agreement, allowing the project to become commercial and bankable,” said iSwitch Chief Commercial Officer, Andrew Koscharsky earlier this year.

However, seven months after iSwitch’s pledge, it has shut its retail operations amid soaring energy prices in Asia.

“Unfortunately, due to current electricity market conditions, we will be ceasing our electricity retail operations on 11 Nov 2021,” the company said in a statement.

It also said that its existing customers will be transferred to SP Group.

SP Group meanwhile has signed a Memorandum of Understanding on October 12 with EDF Group to jointly develop a subsea transmission cable to support renewable energy import from Indonesia.

It’s not clear if iSwitch’s agreement with Sun Cable has been passed on to another energy retailer.

Meanwhile, another electricity retailer in Singapore, SilverCloud Energy Pte Ltd, will soon be exiting Singapore’s market amid soaring gas prices, a company representative told Reuters.

“At the moment we are busy with informing our customers to switch to other electricity retailers or transfer back to SP Group with the regulated tariff rate in order to minimize their cost,” said the company representative.

According to the Reuters’ report, SilverCloud’s exit marks the latest casualty among independent electricity retailers in Singapore amid rocketing wholesale energy prices.

At least three other companies have reportedly stopped accepting new clients.

Interestingly, Sun Cable is not among the exhibitors in the upcoming NT Resources Week on 27-28 October at the Darwin Convention Centre.

Chief Minister Michael Gunner said in a statement Wednesday that Sun Cable has established an office in the Territory and employed more than a dozen Darwin firms for initial works.

He added that the project “continues to build momentum and create more jobs and opportunities for Territorians and is another massive sign of confidence in the comeback capital”.

“The Australia-Asia PowerLink will inject $8 billion into the Australian economy, with most of it being spent right here in the Northern Territory,” Mr Gunner said.

In November 2019, Sun Cable secured USD $34 million in financing from Cannon-Brookes’ family fund Grok Ventures and Squadron Energy for the development of the Tennant Creek Energy Portfolio.

In September, Sun Cable said it had cleared a key regulatory hurdle after winning support from the Indonesian government for a subsea cable route through the archipelago. It also announced that it is expanding its proposal by up to 40%, lifting its potential capacity from 14 gigawatts to between 17 and 20 gigawatts.

On Wednesday, Sun Cable announced a team of global technical and advisory experts including Bechtel, Hatch, Marsh, PwC Australia and SMEC (a member of the Surbana Jurong Group) to deliver the Australia-Asia PowerLink project.

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