Australia’s “best” wind energy project changes hands

One of Australia’s most prospective wind projects has been sold by investment bank Investec to a consortium comprising several of its former energy executives and a newly emerging French renewable energy development firm.

The 270MW Hornsdale wind project in South Australia – considered by many to be the “best” unbuilt wind energy project in Australia, and the next off the rank once the current policy uncertainty is resolved – was bought by France’s Neoen and Megawatt Capital, led by Mark Schneider, who was head of Investec’s energy development division before the bank decided to walk away from energy investments in Australia last year.

Neoen and Megawatt Capital are also looking to buy the rest of Investec’s development portfolio, which includes two solar projects in Western Australia, and a pipeline of early stage wind projects in WA and SA.

No wind project in Australia has received financial commitment since early last year because of the policy uncertainty around the renewable energy target.

However, Hornsdale is considered the most likely to be the first developed once that certainty is restored, because of its high capacity factor (estimated to be close to 50 per cent, compared to the high 30s and low 40s for most Australian wind farms).

It also has low connection costs to the grid, is ready to go, and strong support from the local community around the town of Jamestown (see map) and the regional community.

Schneider said it was impossible to predict when Hornsdale might get developed but suggested that if the RET is retained in any form, even with a  small target, then Hornsdale was likely to be first off the rank.

“My view is that we will end up a RET of some sort,” he told RenewEconomy. “That’s because the arguments in favour of the RET are very strong.

“We are likely to come through the current review with a target, but whether we do or we don’t we will over time see growth in renewable energy in Australia. That’s because gas prices are about to kick up, and coal fired generators are coming closer to the end of their design life..

“I can’t be specific when that will happen, but I’m very happy to have some options around.”

Those options will also likely include a 50MW solar project near Kalgoorlie, and a separate 30MW solar project near Geraldton, both in WA.

Schneider said solar in WA was a compelling proposition, because of the excellent solar resources, and the heavily subsidised nature of fossil fuel generation. But right now, everyone was “on the sidelines” waiting for outcome of RET.

The statement from the consortium noted that Hornsdale has the potential to produce sustainable renewable energy at a very competitive price. It noted “construction is expected to commence as soon as a Power Purchase Agreement or a Feed-in Tariff is secured”, suggesting that the owners may bid the project into the ACT wind auction. Schneider did not wish to comment on that.

Neoen said it was looking to build a “leading position” in the Australian renewable market, and said its entire portfolio could comprise up to 1000MW of wind farms, and 100MW of solar power.

“It is an important step for Neoen and this transaction will contribute towards our objective of building 1GW of Renewable Energy projects in the world by 2016,” Romain Desrousseaux, Deputy CEO of Neoen, said in a statement.