Just three months after Origin Energy stunned the renewables industry with a record low power off-take deal for the 530MW Stockyard Hill Wind Farm in Victoria, AGL Energy has delivered more of the same, securing an off-take price of below $60/MWh through the sale of its 453MW Coopers Gap Wind Farm, between Kingaroy and Dalby in Queensland’s south-east.
AGL said on Thursday it had reached financial close on the Sunshine State wind farm – which will be one of Australia’s biggest, once completed in 2019 – with the $22 million sale of the project to the Powering Australian Renewables Fund.
The deal includes AGL writing a PPA for electricity and associated renewable energy certificates of less than $60/MWh for an initial five years, with an option to extend the agreement for another five years at the same – or even lower – price.
In a media statement, AGL said it expected the project to cost a total of around $850 million, funded through a combination of PARF partners’ equity and a lending group including Westpac, Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Financial Group, Societe Generale, DBS Bank, Mizuho Bank and ABN Amro.
The result is undoubtedly a good one for AGL, which created PARF just one year ago, in partnership with the Queensland Investment Corporation, with the goal of using it to underwrite 1,000MW of large-scale renewables to be operated and managed by AGL.
After making its first acquisition in November 2016, buying up the 102MW Nyngan and 52MW Broken Hills solar farms as seed assets, it has managed to keep growing its portfolio, adding the 200MW Silverton NSW wind farm in January 2017.
“More than 800 MW of projects have now been vended into PARF in its first 12 months of operation,” said AGL CEO Andy Vesey in comments on Thursday.
“The strong support we have received from our equity partners and lenders for these projects is testament to the readiness of the private sector to invest in Australia’s energy transformation.”
But Vesey – who recently attended a meeting of energy retail chiefs in Canberra to discuss the problem of Australia’s world-topping electricity prices – was keen to stress that public policy settings remained vital to maintain investor momentum.
“Certainty on energy policy, including the implementation of the recommendations of the Finkel Review, will enable more projects of this kind to go ahead and help place downward pressure on energy prices by increasing supply,” he said.
AGL COO Brett Redman said the Coopers Gap deal has demonstrated the effectiveness of the investment model, the falling price and increasing efficiency of renewables technology and the key role it had to play in Australia’s future energy market.
The project, which will be developed by GE and Catcon, will use 123 specially designed GE turbines to produce around 1,510,000MWh of energy annually – enough to power more than 260,000 average Australian homes.
For GE, the Coopers Gap contract will bring the global giant’s total installed wind capacity to almost 1.4GW in Australia by 2019, when the wind farm is expected to be completed. It is GE’s first wind project in Queensland.
“That’s the largest number of megawatts in a single year by any GE onshore wind country outside the United States, ever,” said Pete McCabe, GE’s global president and CEO of GE Renewable Energy’s Onshore Wind business.
McCabe, too, took the opportunity of this week’s news to call for strong and stable renewable energy policy in Australia.
“Australia is a great market for wind, and today is GE’s second largest region globally for our Renewables business. While we see lots of opportunities in Australia, we need to continue to have policy certainty to drive investment.”
GE said the successful formula for its bid for Cooper’s Gap included custom-designed 115-metre towers for the 3.8MW turbines, to get the optimal wind speed.
The engineering team – which included German wind engineering “boffin” Dr Joerg Winterfeldt – had to ensure that the design of the taller tower avoided vibration when the blades turn and also fit within the logistical puzzle of not being too heavy or wide to cross all the roads and bridges from port to site.