SINGAPORE - Australia's Sun Cable said on Friday (June 24) that a federal government agency has upgraded the investment status of its Australia-Asia Power Link, a milestone the firm says will help with financing one of the world's largest and most ambitious renewable energy projects.
The A$30 billion (S$28.8 billion) power link plans to send electricity to Singapore via subsea cables from a vast desert solar power station south of Darwin in the Northern Territory.
The 4,200km high-voltage cable link will be the longest of its type in the world, and the project aims to meet up to 15 per cent of Singapore's power needs when it is completed by 2029, Sun Cable said.
On Friday, Infrastructure Australia, an independent statutory authority that assesses projects for its national importance, said a review of the Sun Cable project found that it met the stage three "investment ready" assessment for the agency's priority list of national infrastructure projects.
This means it has met all requirements of the priority list and affirms the project's economic benefits.
Sun Cable chief executive David Griffin told The Straits Times this was a strong signal to investors and to Australian government funding agencies.
"This is recognition of the broader Australian government support for the project and that itself is an important consideration from an investor's perspective," he said.
It will help government bodies such as the Northern Australia infrastructure Facility and Clean Energy Finance Corporation in any assessments in co-funding the power link, he said.
Mr Griffin said financing discussions were ongoing but would not name any investors in Singapore or customers, saying it was up to them to make any announcements.
Australian billionaires Andrew Forrest and Mike Cannon-Brookes are backing the project and raised A$210 million in capital earlier this year.
Mr Griffin said he expects financial close, when all the project and financing agreements have been signed, to be in early 2024 with construction starting shortly after. Electricity supply to Darwin is set to begin in 2027, with full operations to start by 2029.
The power will come from solar panel arrays covering 12,000ha about 800km to the south of Darwin. A portion of the power will be stored in large batteries on site, with batteries in Darwin and Singapore to ensure a 24-hour power supply. The goal is to have 3.2 gigawatts (GW) of dispatchable power, which is the amount of electricity that can be quickly supplied on demand to meet customer needs.
Singapore's total power capacity is about 12GW.
The cables taking the power to Singapore will snake through the Indonesian archipelago and seafloor surveys along the route are ongoing, he said, adding that the cables will start to be laid in 2025 and reach Singapore by 2027. There would be three cables in all, totalling 12,600km.
The power link project is forecast to deliver A$8 billion in investment to Australia and A$2 billion in annual export revenues by the end of the decade, Sun Cable said.
It is one of two large-scale green energy projects in Australia that aim to supply energy to rapidly growing economies in Asia.
Last week, oil and gas giant BP announced a major stake in a renewable energy and green hydrogen project planned for Western Australia.
"Multi-gigawatt scale projects have to become the norm in order to have the ability to meet the level of energy demand," said Mr Griffin. "And fortunately, the market seems to be turning that way."