Pilot Energy has confirmed the receipt of a non-binding proposal from EDP Renewables APAC for the acquisition of the Three Springs solar photovoltaic power plant in Western Australia (WA).

The offer, totalling A$11.5m ($7.75m), is structured over a series of staged payments, pending finalisation.

The 376MW solar project, 310km north of Perth, is a significant component of Western Australia’s Mid-West Clean Energy Project, designed to bolster the region’s green hydrogen and ammonia production.

The Three Springs solar PV power plant, with an estimated development cost of A$440m, is projected to have a 25-year operational life, potentially maintaining 90% capacity post that period.

The plant could also be decommissioned, returning the land to its original state. This acquisition aligns with the Mid-West Clean Energy Project’s goal of producing 1.2Mt [metric tonnes] of clean ammonia annually by 2027, utilising renewable energy from solar and wind sources.

Pilot Energy, which paused trading ahead of the announcement, indicated that the proceeds from the proposed sale could be redirected to alternative electricity sources for the green ammonia project.

The company has identified potential generation sites nearer to the ammonia facility.

The Three Springs plant will link to the ammonia production site, located 100km west, via a private mid-voltage transmission network, and may also serve external customers.

The broader Mid-West Clean Energy Project includes plans for Australia’s first offshore carbon capture and storage site, aiming to capture more than 1Mt of carbon annually from early 2026.

The transaction between Pilot Energy and EDP Renewables APAC is anticipated to close by the end of 2024, subject to due diligence and a definitive asset sale agreement.

Pilot Energy chairman Brad Lingo stated: “The proposed sale is a great result for the company, which will provide significant capital […] to progress the Cliff Head carbon storage project and the acquisition of the Cliff Head JV interests, while also accelerating the development of renewable power sources in the Mid West to power the Mid West Clean Energy Project.”