The federal government’s Clean Energy Finance Corporation has stepped in to help fund, and fast-track and expand the connection to what will be the country’s biggest wind farm, and also create a new renewable energy zone in what is being hailed as a landmark deal.
The $160 million of CEFC funds will help upsize a planned 65km high voltage transmission line, which will connect the massive 1.02GW MacIntyre wind precinct to the main grid, and also allow another 500MW of new capacity to be connected in the same area.
The money will be used by the state-owned transmission company Powerlink to build the new link, and two new switching stations in what will now be dubbed as the Southern Downs Renewable Energy Zone (REZ).
Federal climate and energy minister Chris Bowen hailed the deal as an example of the new Labor government’s Powering Australia plan, although it pre-empts the $20 billion Rewiring Australia component that has not actually been put in place as yet. But it is the sort of thing that Labor plans to do with that money.
“The best way to put downward pressure on energy prices is to ramp up investment in renewables, transmission and storage and that is exactly what this $160 million commitment will do,” Bowen said in a statement.
“After a decade of energy chaos from the Abbott/Turnbull/Morrison Governments – the Albanese Government is getting on with the job and working with all states and territories, including Queensland, on the essential energy infrastructure we need.”
The transaction is also notable because it is the first account between a Queensland Government owned company and the CEFC, although it is the financier’s third investment in transmission infrastructure.
“Connecting the massive project to the national grid not only unlocks $2 billion worth of investment, it also boosts reliability of power across the three east Australian states, with clean Queensland-made energy,” Queensland energy minister Mick de Brenni said..
“This model also connects cheaper renewable generation in a way that minimises costs and risks for Queensland businesses and households.”
The CEFC says the significance of the project is that it marks the first time that generator contributions will cover the cost of building critical REZ assets. But because it will be built at scale now, rather than in stages, it will keep connection costs down for the initial or foundation generators.
“This is an exciting demonstration of the transformative power of CEFC capital,” CEFC CEO Ian Learmonth said in a statement.
“Drawing on our experience developing Australia’s large-scale renewable energy sector, the CEFC has created an investment structure that helps Powerlink bridge the financing gap for generators through an initial lower connection charge.
“Accelerating the development of renewable energy zones is an important part of AEMO’s Integrated Systems Plan (ISP).
“The ISP recognises that much of the NEM’s new renewable energy resources will be developed in these areas with good solar and wind resources, and potential for strong network connection as well as strong community support.”
The MacIntyre wind precinct will include 180 turbines in what will be the country’s biggest wind project to date, although it actually comprises two wind farms, the 923MW MacIntyre wind farm majority owned by Acciona, and the 103MW Karara wind project owned by the state government’s CleanCo.
CleanCo has contracted to take a sizeable part of the output from MacIntyre, as well as Karara, while Ark Energy, part of the Korean group that owns the Sunmetals zinc refinery near Townsville, is also a customer and shareholder in the project.
Energy Users Association of Australia CEO Andrew Richards says the new model “fundamentally changes the way that transmission businesses are looking at delivering this type of infrastructure,” and said it should be replicated across Australia.
“It’s fantastic and we want to see more of them adopt this approach across the country,” he said.
