Final approval for the huge solar power project Sun Cable is getting closer after passing its latest hurdle.
Infrastructure Australia has called the Sun Cable project "investment-ready", according to the Australian Financial Review.
For readers wondering what Sun Cable is, it claims to be developing the world's largest solar energy infrastructure network, making it possible to power whole cities with renewable energy.
The company explains its Australia-Asia Power Link will harness and store solar energy from one of the most reliably sunny places on the planet, the Northern Territory of Australia. It will be available for '24/7' transmission to Darwin and Singapore via a high voltage direct current (HVDC) transmission system. This project comes with planned battery storage. It will be capable of supplying up to 15% of Singapore's total electricity needs.
The plan to supply Darwin and Singapore involves a 5,000 km transmission system. As such, it's a massive undertaking.
Image source: Getty Images
Latest tick of approval for Sun Cable
According to the AFR, the $35 billion Sun Cable project has been deemed "investment-ready" by Infrastructure Australia. This move means that it can now potentially receive funding from government agencies, such as Northern Australia Infrastructure Facility and Clean Energy Finance Corporation and, potentially, Export Finance Australia.
Sun Cable managing director David Griffin said (as quoted by AFR):
Now that we have passed this milestone with IA we're at the start of a process to ramp up our financing efforts, for equity and debt for the project. We will be needing support from a wide range of lending entities and we will look to all those opportunities.
Griffin thinks there is "strong industrial demand" for power in Darwin, as well as in Singapore. It could cut the cost of electricity in Darwin by around 12%.
It was reported the export revenue of this project could amount to $2 billion a year, starting in 2028. That's reportedly around the same size as Australia's dairy industry.
When will this start? Construction could start in 2024, allowing electricity to be supplied to Darwin in 2027 with the plan for full operations by 2029.
Once complete, it could replace Singapore's imported gas and help the country reduce its reliance on fuel.
How does this relate to ASX shares?
Sun Cable is not an ASX share. Though, in theory, there's a small chance in the future that it could become an ASX company. However, it certainly puts the spotlight on ASX renewable shares, illustrating how large projects have the ability to decarbonise the region.
There are a number of ASX shares that are involved with renewable energy such as Meridian Energy Ltd (ASX: MEZ), Mercury NZ Ltd (ASX: MCY), Infratil Ltd (ASX: IFT), and Genesis Energy Ltd (ASX: GNE).
There are also other names such as Fortescue Metals Group Limited (ASX: FMG) that are getting involved with green energy efforts. Fortescue's Andrew Forrest is one of the individuals reportedly involved with the Sun Cable project.
