ACT wind auction attracts 18 bids, 1,000MW of proposals

The huge potential for wind energy development in Australia has been underlined after the ACT government revealed it had received 18 proposals for its first wind power auction.

The ACT government is looking to auction 200MW of wind power capacity this year, and says the 18 proposals it received by the close of the tender last Wednesday totalled more than 1,000MW.

The huge response is probably due to the fact that the wind farm developers do not have any other options at the moment, given the uncertainty around the renewable energy target, which has brought new financing for the large scale wind energy industry to a halt in Australia for nearly two years.

The wind industry is also not likely to receive funds or loans from the other clean energy institutions such as the Australian Renewable Energy Industry and the Clean Energy Finance Corporation. The ACT is offering a feed in tariff that will be set by the results of the wind auction.

“The strong competition for the feed-in tariff is partly caused by the uncertainty created by the Commonwealth’s Renewable Energy Target (RET) review which has hindered other investment in the industry,” Minister for the Environment, Simon Corbell said in a statement.

“Wind is currently a buyer’s market and because of this the ACT can expect lower prices now than if the required investments were deferred to a later time,” Mr Corbell said.

The auction process is being conducted based on the solar auction model used during 2012 and 2013, with the successful proponents granted a feed-in tariff at a fixed rate for 20 years. The first solar farm at Royalla was opened last week, while another at Mugga Lane was given planning approval.

Corbell said that as the costs of energy supplied by fossil-fuelled power plants will rise, the feed-in tariff mechanism will mean the costs to ACT electricity customers will decline from the first day of generation in real terms.

The 200MW of wind power is expected to provide about 24% of the ACT’s electricity consumption in 2020 and is key to the Government’s 90% renewable energy target. Another 50MW of capacity, including storage, will be auctioned next year, and up to another 250MW of wind or solar energy will also be auctioned in coming years.

Among those expected to have submitted bids are Union Fenosa, listed company Infigen Energy (which wants to expand its facilities at the Capital wind farm and nearby Woodlawn), and Windlab.

Most of the candidates are likely to be in the immediate area surrounding the ACT, but Corbell has said it will be open to wind farms further afield. This is likely to include the Hornsdale project in South Australia, now owned by Neoen and Megawatt Capital after a buyout of Investec Australia’s renewable energy portfolio.