CleanCo gets extra $500 million to develop 2.3GW of new wind and solar projects

The Queensland state owned CleanCo is to receive an extra $500 million in funds as a downpayment to help develop up to 2.3GW of new large scale wind and solar capacity, with the focus on the state’s central region.

The announcement was made over the weekend along with plans to legislate the state’s renewable energy targets – which aim for 80 per cent by 2035 – and is part of the state’s newly declared intention to maintain a majority share in energy generation.

The focus is on central Queensland because it is currently the home of much of the state’s heavy industry and fossil fuel exports – both coal and gas – and the government sees big opportunities to service low and zero carbon industries into the future.

“We are inviting the world’s largest companies to call regional Queensland home by offering the best place to do business, especially when it comes to delivering clean, affordable and reliable power,” energy minister Mick de Brenni said in a statement.

CleanCo chief executive Tom Metcalfe said central Queensland is the state’s industrial powerhouse and it needs reliable, affordable, clean energy solutions to drive future prosperity and industry development.

“That’s why a cornerstone of CleanCo’s renewable growth program is to support the decarbonisation of industry in Central Queensland, helping the region to thrive in a net zero future.

He said the $500 million investment will accelerate the development of a substantial program of local renewable energy projects which will provide much needed capacity to the SuperGrid,.

“It will enable CleanCo to provide our customers with unique, sustainable retail product offerings and support them on their decarbonisation journeys.”

It is understood that CleanCo will have the opportunity to take up to 100 per cent equity ownership of the chosen projects when they get to financial close, although the scale of that is yet to be determined.

That would require a lot more than the $500 million allocated this week for a plan of this scale.

Private investors have indicated they want more clarity over the state government’s new mandate for overall majority ownership of the 22GW of new capacity needed to meet the renewables target.

CleanCo currently has around 1GW of “firm capacity” from installations inherited from other state owned utilities, including three small hydro stations in north Queensland, the 560MW Wivenhoe pumped hydro facility and the Swanbank gas generator.

It has also contracted around 1GW of new wind and solar capacity – from the Kaban, Dulacca and MacIntyre wind projects, and the Western Downs solar farm. Not all that capacity is up and running yet.

That means that the new mandate represents a switch in focus from PPAs to equity ownership of new wind and solar projects. How that plays out, and the choice of projects to be developed (there is an indicative timeline of having this done by 2030) will be interesting to see.

The CleanCo statement says the initial $500 million will support the development phase of the solar and wind projects, including environmental, engineering and procurement plans, obtaining all approvals and includes First Nations engagement and partnership, community and stakeholder planning.

It will also include approval for all transmission connections required to ready the projects for construction. It is expected it will support up to 4,000 construction jobs.