Australia wind energy industry turns a corner – thanks to states

The large scale renewable energy market in Australia appears to have taken off again, finally bringing to an end the three year investment drought that was the main legacy to the industry of the Abbott government. But the industry has state governments to thank, not the feds.

On Thursday, the 100MW stage one of the Hornsdale wind farm in South Australia was switched on for the first time in an “energisation ceremony” hosted by its French and German builders, Neoen and Siemens.

The French-based Neoen has a rapidly growing portfolio of wind and solar projects in the country, courtesy of its decision to enter the local market in 2012, and riding through the investment drought that followed.

Global CEO Xavier Barbaro said Australia was now becoming a “great place” to invest.

“Neoen has been able to use our extensive wind and solar assets to expand rapidly in Australia since we started operations here in 2012,” he said during a visit to Australia for the opening. “We look forward continued success in Hornsdale and across the country.”

Hornsdale is one of a number of wind and solar farms being built around the country, and almost all owe their existence to state-based initiatives to short-circuit the investment drought caused by federal policy flip flops and the resulting capital strike by major utilities.

Hornsdale stage one, and the 100MW Hornsdale stage 2 (which will be deliver country’s cheapest wind energy when built) are being constructed courtesy of the ACT government’s 100 per cent renewable energy target, and its effective use of a reverse auction mechanism, rather than a market-based scheme.

The first stage was a winner in the ACT’s first wind auction, while the second stage was a winner (with of bid of $A77/MWh) in the second stage. Ultimately, the wind farm will be 270MW. Megawatt Capital owns a minority stake in the wind farm.

Two other projects, the recently completed Coonooer Bridge wind farm in Victoria and the Ararat wind farm in Victoria are also being built after winning ACT government contracts. The Sapphire wind farm in NSW and three small solar farms also won ACT contracts. Another 200MW tender – open to both wind and solar – is being conducted now.

State governments have also taken the initiative to ensure that what investment does occur happens within their own boundaries.

On Wednesday, Victoria announced the imminent construction of two new wind farms, the 66MW Mt Gellibrand project and the 30MW Kiata project, after awarding 10-year contracts after offering to buy renewable energy certificates through a tender.

Another major wind farm, the 170MW Mt Emerald project in Queensland, is also about to begin construction after winning a contract with the Queensland government owned Ergon Energy, while the Queensland and NSW governments have offered power purchase agreements to support 18 solar farms bidding for grant support in a large scale solar program being run by the Australian Renewable Energy Agency.

The only non-state government contracts awarded have been for the Clare solar farm (by Origin Energy), and the decision by Chinese wind turbine manufacturing giant Goldwind to finance its 175MW White Rock wind project in Northern NSW and sell into the spot market.

Neoen’s Barbaro said that he was proud to see his company’s ability to deliver on ambitious clean energy targets.

“You can see the impact through increased patronage of hotels and other accommodation, cafes and small retailers,” he said in a statement. “Also, farmers benefit by having a regular source of income and road infrastructure that even benefits local volunteer fire fighters with new access roads.”