The Australian company CWP Renewables has become the latest winner of the ACT government’s wind energy auction, securing a 20 year contract for 100MW of capacity that will allow it to go ahead and build the biggest wind farm in NSW.
CWP Renewables hopes to complete the 260MW Sapphire wind project near Glen Innes in northern NSW in 2018, and it is also looking to add a solar farm to the facility, starting with an initial 20MW.
It bid a price of $89.10 per MWh for the output of its proposed wind farm. Unlike most power purchase agreements, this price does not rise with inflation and is fixed for 20 years.
The Glen Innes site, combing wind and solar, and another major wind-solar hybrid project, Goldwind’s White Rock wind and solar farms, are expected to form the basis of a major renewable energy hub in northern NSW.
This has been supported by Transgrid, which wants to make use of the high voltage lines and a major sub-station to facilitate the developments.
As part of its tender with the ACT government will build a $3 million micro-grid in Canberra, and relocate to the ACT where it will oversee another $35 million in export opportunities for micro grid technologies.
The ACT auction program, part of its plan to source 90 per cent of its electricity needs from renewable energy by 2020, has underpinned nearly all new wind farm developments in Australia in recent years because of the investment drought caused by policy switches from the Coalition government.
That drought was caused by efforts by powerful factions in the Coalition to bring a halt to the renewable energy target.
One of the biggest opponents of wind farms in the Coalition is deputy prime minister Barnaby Joyce, who was having another pot shot at renewables in the Murdoch media today. Sapphire and the renewable energy hub will be built in the heart of his electorate.
The ACT has held two tenders of wind energy, each of 200MW. The first was won by Coonooer Bridge, now producing power into the grid, the Ararat wind farm in Victoria, and Hornsdale in South Australia. The first tranche of the second 200MW tender was also won by Hornsdale last year, with a bid of $77/MWh, considered to be a record low in Australia. It has also awarded 40MW of solar capacity and a large contract for battery storage installations.
ACT environment and climate change minister Simon Corbell, the architect of the reverse auction scheme, said the tender would provide a “clean, sustainable energy alternative” to gas and coal-fired power generation.
“Today’s announcement is about more than renewable energy generation, it is about powering new high-growth industries to diversify our economy and create the jobs of the future,” he said in a statement.
CWP will be the third wind developer to relocate their asset management operations to the ACT as part of their tender process. CWP will invest $34 million in the development of an ACT-based asset and operations management centre, which will look after its portfolio of wind and solar projects in Australia and Asia.
It will also invest $3 million in a “world-leading zero carbon micro-grid” to be developed at CIT Bruce.
This forms part of a $33 million investment in local micro-grid initiatives with strong trades training and research integration. CWP also will invest $35 million to develop an Asia-Pacific micro-grid export hub in the ACT.
Alex Hewitt, managing director CWP Renewables, said his company was delighted to have been successful in winning the ACT wind auction.
“The ACT purchase of renewable energy from Sapphire Wind Farm has allowed us to commence construction of what will be the largest wind farm in the NSW,” Hewitt said in a statement.
He told RenewEconomy later in an interview that the 100MW contract would enable the company to take advantage of high prices for renewable energy certificates and build a further 160MW that would be sold into the merchant market.
A Thai company, Wind Energy Holdings, will co-invest in Sapphire. CWP is also looking to engage the community with an offering of equity in the wind farm. It is proposing to work with community energy group Embark to map out a plan for community investment. “It is the right thing to do,” Hewitt says.
CWP already operates the 113MW Boco Rock wind farm and the 107MW Taralga wind farm in NSW, and has several other large wind projects.
Corbell said that by the time Sapphire started producing energy in April 2018, the ACT would be sourcing 80 per cent of its energy needs from renewable sources and well on the way to achieving 90 per cent by 2020.
“The ACT’s pioneering reverse auction process ensures that Canberrans pay low prices for electricity while receiving maximum local investment benefits. Both Wind Auction II winners have delivered on these fronts.” Corbell said.
He said the total costs to consumers associated with all current and proposed large-scale renewable energy projects will peak at $4.67 per household per week, on average, in 2020. He expects much of this to be offset through energy efficiency initiatives.