How DOES Sydney Renewable Power Company generate revenues?
Sydney Renewable Power Company (SRPC) has entered into a contract to fund the installation of solar photovoltaic panels at ICC Sydney for a fixed price. The company receives revenues under this contract based on the entire output of the solar panels multiplied by a fixed price schedule, which increases at 3% p.a.. Sydney Renewable Power Company is also entitled to receive and sell renewable energy certificates (Large-scale Generation Certificates or LGCs).
WHAT ARE THE RISKS?
Like any company, Sydney Renewable Power Company faces a number of risks. These are set out in detail in the Offer Information Statement issued by SRPC on 31 October 2016 and available here.
HOW CAN i INVEST IN SYDNEY RENEWABLE?
The Share Offer in Sydney Renewbale is now closed. The $1.4 million capital raising ran from early November 2016 until mid-March 2017. It was made under an Offer Information Statement dated 31 October 2016, a copy of which is available here.
HOW LONG WILL THE PROJECT RUN FOR?
SRPC has a contract to be paid for the power generated by the PV installation until 2041.
What types of MONETARY distributions does the investment expect to make?
SRPC expects to make 2 sorts of distributions - dividends, and return of the capital invested. Please see sections 4.12.1 and 4.12.2 of the Offer Information Statement for further information on these distributions.
What will happen at the end of the contract term at ICC Sydney?
After the PV Array has operated for 25 years, ownership of the PV Array will transfer to the NSW Government, at which stage, SRPC will have no obligation to operate, maintain or remove the PV Array from ICC Sydney. As SRPC is not expected to have further income at this point, it is expected that the Company will be wound up at that point in time, having met the Company’s objectives.
WHAT ARE LGCS?
LGCs are Large-scale Generator Certificates. An LGC represents one megawatt hour (1 MWh) of electricity generated by an accredited renewable energy power station under the Renewable Energy Target (RET). For example, if the solar PV installation at ICC Sydney generates 500 MWh in a calendar year of operation, Sydney Renewable Power Company will receive 500 LGCs.
What happens if the RET is reduced or abolished?
More information on the RET can be found here. In the event that the RET is reduced from 33,000 GWh by 2020 to a smaller number, it is expected that the price of LGCs will fall in the market place. This would have a negative effect on SRPC and many renewable power generators in Australia. If the RET is reduced or abolished, SRPC intends to consider alternative sources of revenue such as selling carbon offsets. More details of the risks faced by SRPC are set out in the Offer Information Statement issued by SRPC on 31 October 2016 and available here.
How will the solar PV installation be maintained?
Scheduled maintenance, unscheduled maintenance and cleaning have been contracted out for the life of the project as part of the facilities management of the entire ICC Sydney site. SRPC will pay a fixed price for these services each year.
Is Sydney Renewable Power Company a social enterprise, not-for-profit or regular business?
SRPC is an unlisted public company limited by shares. SRPC is run by volunteers but acts and operates like a regular business. That’s because the Board believes that meaningful progress in the transition from a high-carbon to low-carbon economy is best achieved by catalysing investment in renewable energy.
What makes SRPC different from regular businesses is that we focus on local, renewable energy installations only.
Who is Embark?
Embark is a registered charity that supports community participation in renewable energy projects. This support can be through information sharing, coaching and in some cases, financial assistance. Embark lent money to SRPC that was needed to secure the contract at the ICC Sydney site. This loan is expected to be repaid with money raised in the share offer of SRPC. Information about Embark can be found at www.embark.com.au
WHAT ARE THE KEY POLICIES OF SYDNEY rENEWABLE?
srpc shareholders with other questions about the investment?
If shareholders have any queries about their investment, please contact Link Market Services on +61 1300 554 474.