Rod Drury and Sam Morgan help get $300m solar farm project over the line

Tuesday, 7 June 2022

An artist’s impression of what Lodestone’s solar farms will look like, with sheep grazing under solar panels.

One of the largest of the discussed investments in solar power in New Zealand appears to be falling into place after high-profile investors agreed to contribute about another $100 million to the venture.

Lodestone Energy says it has now secured all the $300 million it needs to build five solar farms near Dargaville, Kaitaia, Whakatane, Edgecumbe and Whitianga.

Together they should generate 350 gigawatt-hours of electricity a year, or a little under 1% of the country’s power.

Xero founder Rod Drury has come on board as an investor in Lodestone, joining existing backers who include The Warehouse founder Stephen Tindall, Trade Me founder Sam Morgan and Gary Haddleton, another early investor in Xero.

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Xero founder Rod Drury has joined Lodestone as an investor, in its second funding round.

Investors are understood to have put about $150m into the venture in total, with debt-funding in place for the remaining $150m needed by the company.

Trade Me founder Sam Morgan, who has invested a total of $18m in Lodestone in the latest and earlier funding rounds, said it was “definitely a financial investment”, as far as he was concerned.

“I'm keen to do things in New Zealand that make New Zealand better, but I’m not throwing money everywhere at everything,” he said.

“I think these things need to stand on their own two feet to be sustainable.”

Lodestone expected last year that it would have all its solar farms built by the end of next year, though dates for its first have slipped by a few months. (Video first published in 2021)

Several large solar power projects have been unveiled in recent months as investors jostle to capitalise on what has been described as a “gold rush” moment for the renewable power industry.

These include a $1.3b project to provide 4% of the country’s power needs that is being promoted by Helios Energy, a company formed by a group of United States and New Zealand investors and which claims Google senior vice president Urs Holzle as a backer.

Another is Nova Energy’s plan to build a 700GWh solar farm near Taupo.

Broker Forsyth Barr calculated in April, prior to Helios’ announcement, that intentions had been discussed for a total of 4.6 terawatt-hours of grid-connected solar power.

That would be sufficient to provide more than 10% of the country’s power, with Helios’ plan taking that to about 14%.

But Forsyth Barr analyst Andrew Harvey-Green cautioned not all of those projects would necessarily go ahead.

Lodestone managing director Gary Holden forecast a “war of attrition” as weaker projects fell by the wayside.

But he believed it was realistic for grid-connected solar farms to provide more than 10% of the country’s power before its contribution hit any constraints.

“It's kind of an essential component of any grid now,” he said.

“Hydro is a pretty good battery in the short term, so as more solar energy is injected during the day, hydro can shift more into the evening.

Holden forecast Helios would be a strong competitor in solar generation, given “its background and shareholder support”.

Energy Minister Megan Woods lauded Lodestone’s plan as “hugely exciting” when it was first announced in May last year.

The company originally expected it would begin construction of its first solar farm, a 62GWh farm in Kaitaia, last year and would have completed that this summer.

It now expects it will be completed around the middle of next year.

Lodestone chief financial officer Chris Jewell, said the last six months had been about getting its “ducks in a row” finalising the consents, construction, and transmission contracts.

“From here, things will move quickly,” he said.