The rapidly expanding business-focused retailer Flow Power has signed another contract with a new renewable energy project, adding to the growing portfolio of wind and solar projects it is using to deliver cheaper electricity to corporate customers.
Flow Power announced on Thursday that it has contracted to take the output from 50MW of the proposed 104MW Lakeland wind farm that Windlab is looking to build about 60km south-west of Cooktown on the Cape York Peninsula in north Queensland.
The contract is for up to 10 years, and will include the delivery of large-scale renewable energy certificates. The price was not revealed, but based on recent contracting is likely to be around $60/MWh – cheaper than prevailing wholesale prices.
The deal offers Flow Power an entry into the Queensland market and follows deals with the Ararat wind farm and the proposed Kiamal solar farm in Victoria.
Flow Power specialises in offering corporate renewable Power Purchase Agreements (PPAs) which deliver cheaper electricity supply – using wind and solar as the bulk energy source and “firming” contracts for the balance. Its corporate clients include Olam Orchards, ANCA Machines and Select Harvests.
Flow Power managing director Matthew van der Linden said that while the companies could not reveal details on the price of the contract, it was locked in at a “very competitive price” in the Queensland market, that customers would be very keen to take advantage of.
“By signing this Term Sheet with Windlab Limited, we are committing to bringing the benefits of corporate renewable PPAs to Queensland,” he said.
“The project itself is unique in Queensland,” van der Linden told RE on Friday, in that it’s a wind farm in a state better known for its big solar projects.
“As we go to market to offer corporate PPAs, it is a key strategy of Flow’s to provide diversification,” he added. “Large customers can come to us and purchase off-take from both wind and solar farms, to minimise some of the risk that (they) face from a variable load.
“And we aim to have that strategy in place in every NEM state by the end of the year,” he said, reaffirming previously announced plans to have 50MW plus of wind and solar in each of those states, including Tasmania.
Windlab CEO Roger Price, whose company is also building the Kennedy Energy Park, combining wind, solar and battery storage in north Queensland, said the agreement was an important step to bring Lakeland close to financial close and lock in debt and equity arrangements.
Price told RenewEconomy that the remaining output would likely be sold on the merchant market.
“Wind in Queensland is quite valuable – we all know what the duck curve doing. The evening peak will be quite valuable and the wind we are producing has a bias towards the evening,” Price said.
Price would not comment on the price of the PPA. “It is competitively priced, that’s all we can say,” he said.
He said development approvals and a grid connection agreement are “already in hand”. He said financing should be complete in the next month or two, with construction to begin before the end of the year and completed early in 2020.
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.