The first large-scale solar project in the Australian state of Tasmania has been locked in, with project developer TasRex reaching a commercial offtake agreement with utility Hydro Tasmania.

TasRex has signed a power purchase agreement with Hydro Tasmania for the approved 288 MW Northern Midlands Solar Farm, which is being developed near the city of Launceston, Tasmania.

The offtake agreement will see Hydro Tasmania take 100% of the generation from the AUD 500 million ($325.8 million) project, which is being developed across a 600-hectare site on the Connorville sheep station near Cressy, about 35 km south of Launceston.

TasRex said it will now work with Melbourne-based renewable energy investment company Birdwood Energy to develop, fund and deliver the project.

With local government development approval secured and technical studies well underway, construction is expected to commence by 2026, with power generation expected to be available in 2027.

TasRex CEO Bess Clark said once construction has been completed, grazing activities will resume on site, with the landowners planning to graze 2,000 head of sheep under the solar panels.

“This transformative project redefines the possibilities for solar energy development in Tasmania and is an important step towards Tasmania’s 200% renewable energy target,” Clark said. “It is exciting to think that this land will soon be generating enough power for 70,000 homes, while still supporting sheep grazing for high-quality wool production.”

Tasmania Energy Minister Nick Duigan said the Northern Midlands project is a huge step toward achieving the state government’s 2040 renewable energy target.

“This is a significant project that will diversify our state’s renewable energy generation mix and support job creation and economic growth in the local community during construction and once commissioned,” he said.

The 288 MW Northern Midlands project will comprise an estimated 670,000 solar panels and will be Tasmania’s largest solar farm. At full capacity, it will be the island state’s fourth-largest generator after Gordon and Poatina hydropower stations and the Tamar Valley Power Station.