CBD gets PPA for Taralga wind farm

CBD Energy secures PPA for $250m Taralga wind project

CBD Energy secures PPA for Taralga wind farm, as solar revenue evaporates and write-downs hit bottom line

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CBD Energy said it has signed a power purchase agreement with TRUenergy that will allow construction of the 108MW Taralga wind farm to begin later this year – its first utility scale wind project in Australia.

The PPA is also the second  to be signed by TRUenergy in recent months, and comes on the same day that New Zealand company Meridian Energy announced it would build a 131MW wind farm at Mt Mercer near Ballarat in Victoria – although that facility is being built by Meridian as part of a potential plan to build a vertically integrated energy utility in Australia, and the company will finance it on its own.

The $250 million Taralga wind farm – which won approval only after a fierce court battle – had been in doubt about the failure of the AusChina joint venture that CBD Energy signed last year to take the project forward. However, CBD then took on the principal development role to secure the PPA and equity and financing partners. The PPA is a key element in gaining financing, and partners and the EPC contractor are expected to be announced soon.

TRUenergy is widely believed to be the most likely utility to sign such agreements with wind farm developers, as it has fewer projects in its own pipeline, and also is thought to have fewer renewable energy certificates banked than Origin Energy and AGL Energy, which have enough to last till around 2017 and late 2015 respectively. It recently signed a PPA for the 107MW Boco Rock wind farm north of Bombala in NSW, which is to be built by Continental Wind Partners (CWP).

TRUenergy said in this interview with RenewEconomy earlier this year that it was ready to invest in renewables again to meet the 2,500MW of capacity it would be responsible for under the renewable energy target. However, a recent attempt to go ahead with the Stony Gap wind farm was rejected by local council, and the company is now taking legal action.

The announcement on Taralga came as CBD Energy revealed a bottom line loss of $21.7 million for the 2011/12 financial year, hit by a sharp slump in revenues from its solar business and writedowns from a failed acquisition, a patent battle over storage technologies, costs of its purchase of Westinghouse Solar, and losses in trades of small scale technology certificates.

Last year, the company posted a net profit of $2.6 million, but revenue from its major solar business, eco-Kinetics this year slumped from $125 million to $35 million, resulting in a $10.3million loss. That brand has now been discontinued and the business folded into its CBD Solar division, which also experienced a sharp slump in revenues from $14.3 million to $3.7 million and a loss of $1.4 million.

CBD said the residential solar PV market was showing signs of stabilisation as most areas of the country approach “grid parity” and after markets recovered from abrupt changes in feed in tariffs. CBD says it has implemented changes that will deliver annualised cost savings of $2 million.

It said the Australian commercial solar sector is still relatively immature, but its experience in international markets, particularly in Italy where it has a joint venture, will mean it is well positioned.

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2 Comments
  1. steve the sparky 8 years ago

    With CBD Energy the question has to asked…. What has Gerry done to upset major shareholder Peter Hall?

    Hall has taken an absolute bath on the stock, selling his stock down from 20% to 10% in recent months…

    I think the Westinghouse purchase was to get a back door US listing for the stock as their product offering is questionable in the Australian market.

  2. Mario 8 years ago

    Steve – I suspect Peter Hall thinks the stock is a bad investment – but I could be wrong ?? . The Taralga site is still owned by RES – it is obvious CBD are a little short on readdies and couldn’t fund a purchase – so are they are just helping out and clipping the ticket? . Did i miss an announcement the AusChina group is in divorce mode .- such a promising start 3000 MW by xmas – maybe the Chinese didn’t like the coffee in Double Bay.
    On a closer read of this impressive result – The actual operating loss for CBD is $31m – bummer no dividend for Hunter Hall. On last look the CBD intended US bride – Westinghouse Solar lost only $5m in the first half of the year and is fighting delisting from the Nasdaq . So it looks like an ideal marriage for this internationally veritically integrated renewable energy company. On Westinghouse Solar you need to remain optimistic ‘plug and play’ solar is like flared trousers it could come back .
    But your right Steve -CBD needs to get into the US market as they are just misunderstood . How is their solar manufacturing going on the gold coast or the 100 MW in Thailand , the 3000 MW of wind – the 100 MW CSP project in China – and the carbon block storage – Neighood Watch retail just to name a few ? All good gigs – in the world of clean energy – vision is important
    Mario

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