Chinese coal giant to test wind energy technology in Tasmania

Chinese coal giant Shenhua Group has revealed plans to develop a small test wind farm in Tasmania to demonstrate China-made turbine technology, which has potential to enter the Australian market.

The 10-30MW demonstration plant is part of an agreement between Shenhua and local Tasmanian renewables group Hydro Tasmania, announced at a ceremony in Canberra on Monday attended by the Australian Prime Minister and Chinese President Xi.

The project will test the technical feasibility of new turbine generation technologies from a number of existing Chinese manufacturers, including integration, operation and new design.

This is not the first time the Chinese state-owned coal company has invested in wind energy in Australia – it has a 75 per cent stake in Woolnorth Wind Farm Holdings, a joint venture with Hydro Tasmania which owns the Musselroe (168 MW), Studland Bay and Bluff Point wind farms (collectively known as Woolnorth and 75 MW and 65 MW respectively) in north east and north west Tasmania.

And in April last year, it signed a strategic cooperation agreement with Hydro Tasmania and the Shenhua Group signed a strategic co-operation agreement to investigate a joint Australian wind portfolio of up to 700MW by 2020.

But it is the first time that Shenhua – whose plans to construct a $1 billion open-cut coalmine on NSW’s Liverpool Plains were last week recommended for approval by the Department of Planning and Environment – will supply its own technology; a strong sign that the coal major is adjusting to a changing global economic and energy landscape.

“Shenhua is transforming itself into a clean energy and technology supplier from a coal-based integrated energy company, and renewable energy is an important part of that endeavor,” said Shenhua Group chairmain Dr Zhang Yuzhuo.

“Hydro Tasmania is a strong joint venture partner and we will work closely together to explore more potential opportunities for cooperation. The existing and future projects showed the efforts and determination of the two companies, as good corporate citizens, to combat the challenge of climate change.”

Hydro Tasmania Chairman Grant Every-Burns said the approach would complement an existing successful joint venture at an appropriate size and scale for the current investment climate.

“There is no doubt the current climate for investment in the renewable energy sector in Australia is uncertain,” Every-Burns said. “However, we continue to look at potential projects for collaboration between the joint venture partners that are commensurate with the current risks in zero emissions energy investments.

“This project provides a significant opportunity to build on our successful relationship while providing a showcase for Chinese technology.”

The Bank of China has expressed interest in providing debt financing for the testing wind farm and is currently part of the syndicate that provided debt financing for the joint venture wind farms in Tasmania.

Hydro Tasmania has begun work on developing a proposal that also includes working with the Chinese manufacturers on Australian compliance and grid connectivity issues. The financial structure of the project will be determined as part of the investigation process announced on Monday.