Australia’s biggest wind precinct hit by connection delays and cost blowout

The Queensland government owned CleanCo has pulled its plans to build a big wind farm in what would be the biggest wind energy precinct in the county, citing delays over connection agreements and rising costs for the decision.

CleanCo had proposed to develop its own 103MW wind facility – known as the Karara wind farm – as part of the 1.03GW MacIntyre precinct that is being developed by Spanish energy giant Acciona Energia near Warwick in the south of the state.

“As a result of significant delays to the connection process for the Karara Wind Farm, and subsequent impact to costs, CleanCo is pausing the development of the project,” a CleanCo spokesperson said in a statement.

The major part of the $2 billion project, the 923MW MacIntyre wind farm, is still going ahead. It is majority owned by Acciona Energia and 30 per cent owned by Ark Energy, part of the Korea Zinc group, which will use the output to help power its Sun Metals zinc refinery near Townsville.

Acciona is also planning to add the 1GW Herries Range wind farm to the MacIntyre wind precinct, taking the precinct’s total generation capacity to what is referred to as the “Big Mac” project to more than 2,000MW, making it one of the largest in the southern hemisphere.

The state-owned transmission company Powerlink only recently boasted of erecting the 100th of 167 transmission towers required for the project. It said then it expects the grid construction work to finish by the end of 2023, for a planned commissioning of the first wind power from late 2024.

However, RenewEconomy understands that the delays are not related to the timing of the new transmission link, but the actual connection agreement for the Nordex turbines proposed by Acciona at the precinct.

This is not the first time this has happened with a major project in Australia. The Stockyard Hill wind farm in Victoria, still the biggest in the country until MacIntyre is complete, also suffered major delays because of issues around its equipment.

It is understood that CleanCo was not happy to carry the risk of the connection agreement, but Acciona – as a privately owned company – is more comfortable with the situation.

Powerlink confirmed the delays are not on their end. “There are no delays on the Powerlink connection works for the MacIntyre Wind Precinct project,” a spokesperson said.

The decision on Karara represents an increasingly difficult investment environment for new renewable energy projects across the country, despite strong targets by state governments and supportive policies from the federal government.

A lot of the problems centres around the increasing costs of transmission, delays in new links, and connection agreements, and increases in the cost of the wind farms or solar farms themselves.

In the first quarter of this year, for Clean Energy Council says, there were no financial commitments for new wind or solar projects. AGL said last week costs had jumped and wind farm PPAs were being offered at around $70s a megawatt hour, well up from the $40s cited less than two years ago.

Despite pulling out of the Karara wind farm, the CleanCo spokesperson said the money budgeted for the project will still go towards renewable energy development in Queensland.

The state government had provided the equity for CleanCo’s Karara project but it was withdrawn in the latest budget and folded into a revised $500 million package allocated to CleanCo to develop a portfolio of renewable energy projects in Central Queensland.

CleanCo intends to retain its power purchase agreement for around 400MW of wind output from the 923MW MacIntyre wind farm. It expects this PPA to take effect from 2025, when that part of the wind complex is due to be complete.

RenewEconomy has reached out to Acciona and the state government for further comment, and is awaiting a response.