A DAY IN THE LIFE
ESCO Pacific chairman
Currently developing the 148MW Ross River Solar Farm south-west of Townsville, Queensland, ESCO Pacific is fast becoming one of Australia’s leading utility scale solar farm providers. ESCO chairman Darryl Flukes spoke to Elizabeth Fabri about his admiration for the way the renewable industry continues to stride forward with investments and ever smarter solutions – “rather than try to drown out the naysayers, the industry just gets on with it”. q. describe your education and professional career.
Graduating as a Chemical Engineer, this lead me into the oil industry where I started with BP in the UK in a supply logistics role.
Supply logistics lead to “supply trading” where I first discovered the hidden value of asset optionality – a subject which has intrigued and interested me throughout my career.
Later I joined Vitol, a global trading and logistics business.
Here I sought out asset-backed trading opportunities, ultimately running an oil and chemicals storage and re-processing operation.
Following a timely move to Australia in 1998, when the energy markets were de-regulating, I joined Southern Hydro, a recently privatised hydro-generation business.
This perfectly suited my interest in trading, and extracting value from, asset optionality.
Further, to my surprise, commodities trading and risk management was little developed in Australia so the concept of trading around an asset, while minimising risk, was alien to many in the energy industry.
So, much misunderstood, Southern Hydro was privatised for just $400m and, having proven its value, was ultimately purchased by AGL in 2005 for over $1.2bn.
Having demonstrated how active risk management can add value, I was keen to find other opportunities to demonstrate and implement similar strategies, so established an advisory business, Flukes Value Management.
A key client was Infratil, which lead to taking on the role of chief executive of Infratil Energy Australia (IEA).
Infratil’s Australian energy investments were spearheaded by the retail business, Lumo, and included investments in peaking generation (asset optionality again) and Perth Energy in WA.
From start-up in 2006, IEA was sold in 2012 to Snowy Hydro for over $600m.
Since then, though senior management roles have been tempting, advisory and board roles have kept me occupied, including as a director of Meridian Energy (Powershop) Australia.
Managing risk to add value remains a core theme (in fact it is essential in any energy retailing business) and the challenge I have set myself now is, having always been on the supply-side, how can we best extract asset optionality from the demand-side?
Further, I realised some years ago that, somewhat subconsciously, I had always been attracted to the cleaner forms of energy supply – hydro, wind, solar, gas – hence the focus on the renewables sector.
You joined esco pacific as chairman in June 2016. What have been some of the highlights and challenges in your first year?
Without doubt, the highlight was closing on the 148MW Ross River Solar Farm project earlier this year.
It was a delight to see the whole team looking and feeling so proud of what they had achieved – deservedly so.
I have also enjoyed watching Steve Rademaker (the managing director) grow the team – from just three in a tiny office space just 12 months ago, outgrowing that office (very cosy at times) to a happy, multi-faceted crew of 14-strong and growing.
Recognising early that speed was critical presented challenges from having to push hard on numerous fronts concurrently with a small team.
Other challenges were just typical of any start-up – gaining credibility, no one to delegate to, and so on.
q. How is the construction at the $225 million Ross River Solar Farm tracking?
The project is on track to achieve commercial operation in April 2018.
We have a very good and experienced internal project team lead by Ekistica overseeing construction, undertaken by Downer Group, and things are moving along well.
q. What are some of the other solar farm projects esco pacific has in the pipeline and when do anticipate these will be brought online?
ESCO has more than 1.25GW of approved projects in the pipeline, 400MW of which could begin construction this year.
ESCO is well advanced in a process to raise finance to commence construction of these projects.
Not content with solar development alone, ESCO is also investigating developing a pipeline of utility scale battery storage, whether integrated with solar or stand-alone.
q. What do you enjoy most about working in the renewable space?
At the risk of sound clichéd, there is something comforting about contributing to providing a cleaner planet for our grandchildren.
I also admire the way in which the renewable industry continues to stride forward with investments and ever smarter solutions while the deniers continue to squabble.
Rather than try to drown out the naysayers, the industry just gets on with it.
Sure, we all recognise the challenges of intermittency but now renewables have clearly demonstrated they are the lowest cost supply, the same enthusiasm will turn to addressing the reliability issue through intellect and innovation – not through applying a 150-year-old technology.
q. What advice would you give to someone who aspires to a career like yours?
Not sure those graduating today will have such inspirations, careers have changed so much over the last 30 years.
However, I would encourage practicing something I did realise along the way – as soon as you stop learning and growing in your job, move on.
Though not always easy when income security is important, if you have that attitude, better opportunities will present themselves.
Also, don’t underestimate the value of a broad network – take every opportunity to meet new people and learn.
It can be amazing how a seemingly innocuous conversation at a random lunchtime forum can provide surprising returns many years later.
“ESCO HAS more THAN 1.25gw Of Approved PROJECTS in THE pipeline, 400mw Of Which COULD begin CONSTRUCTION This year.”