Palau 13.2 MWac Solar Photovoltaic Plus 12.9 MWh Battery Energy Storage System Project

Overview

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The pristine island nation of Palau is small yet proud, standing as a bright beacon of sustainability in the vast Pacific Ocean. As a small island developing state, the Republic of Palau sought to wean itself off its dependence on fossil fuel for power, which accounts for 99.7% of the country’s power generation. To address this issue, Palau invited Solar Pacific Energy Corporation (SPEC), Alternergy’s solar developer, to develop a clean, renewable energy source. 

SPEC has been cultivating relationships in Palau since 2014. After a competitive RFP process, SPEC was awarded a Power Purchase Agreement (PPA) in April 2021 to supply 23,000 MWh annually to Palau Public Utilities Corporation (PPUC). Solar electricity will be produced by a hybrid 15.3 MWdc (13.2 MWac) solar photovoltaic (PV) plus 10.2 MWac/12.9 MWh battery energy storage system facility. 

Extensive safeguards to protect Palau’s pristine environment

SPEC did not leave any stone unturned to protect the pristine Palau ecosystem. For the project site, SPEC leased 16 hectares of clear savannah land in Ngatpang State on Babeldaob, Palau’s largest island. This land is largely clear of forest cover, but numerous changes were made to the solar array layout to avoid cutting any tree and leave nearby forested areas untouched. 

Environmental studies ensured the project site will not threaten endemic Pacific Land Snails and Ants. Environmental and Social Impact Study, Critical Habitat Assessment, Biodiversity Action Plan, Flood Study, Tree Survey and Topographic Survey were conducted to comply with lender’s stringent environmental and social standards. After an extensive review, Palau’s Environment Quality Protection Board gave its permit to the project.

Finding Right Partners with Similar Philosophies

The Australian government extended full backing to this milestone Palau Solar Battery Project. Foreign Ministers Marise Payne and Penny Wong visited Palau in 2021 and 2022 to formally announce funding support of US$22 million through the Australian Infrastructure Financing Facility for the Pacific program of the Department of Foreign Affairs and Trade (DFAT). 

Because of the transformational impact of this project, three conservation- minded investors joined SPEC and Alternergy as shareholders of Solar Pacific Pristine Power Inc (SPPP), the project company. 

SPPP tapped Juwi Renewable Energies as its turn-key Engineering, Procurement, and Construction (EPC) Contractor. Hailing from Germany, Juwi has built many utility-scale hybrid solar projects, including the DeGrussa and Agnew solar farms in Australia. With rising cost of solar components, SPPP signed Early Works Agreements to lock in pricing for the First Solar PV Modules, SAFT battery system, and SMA inverters. The EPC contract was finalized in March 2022 and Notice to Proceed issued a month later. 

Together with DFAT and Juwi, SPPP thoroughly reviewed its equipment supply chain to avoid any exploitation risk of forced labor during the manufacturing of the project’s key components. This precaution led to the selection of PV modules from First Solar of U.S. 

After the PPA was assigned to SPPP, Financial Close was reached in April 2022 with debt drawdown from Export Finance Australia and equity infusion from SPPP shareholders. The Palau Solar Battery Project will be the largest such project in the Western Pacific. It will lessen Palau’s imported fuel dependency, a major step towards its ambitious goal of 100%.