CBD Energy said it has signed a power purchase agreement with TRUenergy that will allow construction of the 108MW Taralga wind farm to begin later this year – its first utility scale wind project in Australia.
The PPA is also the second to be signed by TRUenergy in recent months, and comes on the same day that New Zealand company Meridian Energy announced it would build a 131MW wind farm at Mt Mercer near Ballarat in Victoria – although that facility is being built by Meridian as part of a potential plan to build a vertically integrated energy utility in Australia, and the company will finance it on its own.
The $250 million Taralga wind farm – which won approval only after a fierce court battle – had been in doubt about the failure of the AusChina joint venture that CBD Energy signed last year to take the project forward. However, CBD then took on the principal development role to secure the PPA and equity and financing partners. The PPA is a key element in gaining financing, and partners and the EPC contractor are expected to be announced soon.
TRUenergy is widely believed to be the most likely utility to sign such agreements with wind farm developers, as it has fewer projects in its own pipeline, and also is thought to have fewer renewable energy certificates banked than Origin Energy and AGL Energy, which have enough to last till around 2017 and late 2015 respectively. It recently signed a PPA for the 107MW Boco Rock wind farm north of Bombala in NSW, which is to be built by Continental Wind Partners (CWP).
TRUenergy said in this interview with RenewEconomy earlier this year that it was ready to invest in renewables again to meet the 2,500MW of capacity it would be responsible for under the renewable energy target. However, a recent attempt to go ahead with the Stony Gap wind farm was rejected by local council, and the company is now taking legal action.
The announcement on Taralga came as CBD Energy revealed a bottom line loss of $21.7 million for the 2011/12 financial year, hit by a sharp slump in revenues from its solar business and writedowns from a failed acquisition, a patent battle over storage technologies, costs of its purchase of Westinghouse Solar, and losses in trades of small scale technology certificates.
Last year, the company posted a net profit of $2.6 million, but revenue from its major solar business, eco-Kinetics this year slumped from $125 million to $35 million, resulting in a $10.3million loss. That brand has now been discontinued and the business folded into its CBD Solar division, which also experienced a sharp slump in revenues from $14.3 million to $3.7 million and a loss of $1.4 million.
CBD said the residential solar PV market was showing signs of stabilisation as most areas of the country approach “grid parity” and after markets recovered from abrupt changes in feed in tariffs. CBD says it has implemented changes that will deliver annualised cost savings of $2 million.
It said the Australian commercial solar sector is still relatively immature, but its experience in international markets, particularly in Italy where it has a joint venture, will mean it is well positioned.