Infigen inks Collector wind farm PPA in shift to renewable retailing

Infigen Energy has progressed its expansion into the electricity retailer space, securing an agreement to purchase 60 per cent of the output from the Collector Wind Farm, as the project nears completion.

Infigen Energy, which started life predominantly as a wind farm developer, has sought to reposition itself as an integrated electricity company, expanding its operations to provide electricity retailer services for commercial and industrial customers.

With an eye to diversifying its business model into serving as a supplier of renewable electricity to large energy users, Infigen Energy has secured a power purchase agreement with RATCH Australia, the developers of the Collector project, for just over half of the output from the wind farm.

It is the second such deal signed by Infigen Energy, which has previously secured an agreement to purchase the output of the Toora wind farm in Victoria, and significantly expands the amount of renewable electricity Infigen has under contract for its electricity retailer business.

The 227MW Collector Wind Farm is currently nearing the completion of construction, as is being built in the New South Wales Southern Tablelands and around 55km north of Canberra.

“The Collector Wind Farm PPA is an important milestone in the delivery of our strategy. Taken alongside the Toora Wind Farm PPA, Infigen has now delivered 157MW of our 600-700MW growth target, or approximately 40% of the NSW target of 300-400MW,” Infigen Energy managing director Ross Rolfe said.

“The PPA diversifies our portfolio and will lower the variability of our renewable generation. As we grow our supply of renewable energy, we are able to increase firm electricity sales to customers and drive additional value from our fast start firming assets.”

Infigen Energy operates seven of its own wind farms across New South Wales, South Australia and Western Australia, with a total generation capacity of 557MW, with an additional 57.6MW under construction at the Cherry Tree wind farm.

The company added a large-scale battery storage system co-located at its Lake Bonney wind farms in South Australia, which includes 25MW/52MWh of storage, and has been one of three such devices that have played a crucial role in maintaining reliable electricity supplies in South Australia.

But compared to the earlier years of the company, Infigen has considerably slowed its development pipeline, opting to maximise the value of its existing assets, rather than seeking additional shareholder capital or debt to finance the construction of new projects.

Infigen Energy shifted its strategy to a “Capital Lite” focus, which will see the company expand its service offerings through the retail electricity market and as a ‘firm’ provider of electricity supplies, as an alternative to expanding the business through the construction of new wind farms.

Infigen will expand the volume of electricity under its retailer offering to large energy users through the new agreement to purchase 60 per cent of the output from the Collector wind farm, the equivalent of 136MW of generation capacity and delivering around 300GWh of electricity each year.

Infigen purchased its first non-renewable power station in 2019, acquiring the Smithfield Open Cycle Gas Turbine, which the company says allows it to sell a higher amount of renewables under long-term supply agreements.

The company sees the Smithfield gas generator as primarily working to ‘firm’ the supply of electricity from its renewable energy projects. Smithfield operated with a capacity factor of just 3 per cent in the second half of 2019, which was “in line with expectations.”

Infigen is targeting a supply portfolio of up to 700MW of renewable energy capacity and is aiming to sell up to 80 per cent of this capacity under firm supply contracts.

“This strategy provides our customer base with competitively priced clean energy, and provides Infigen with both business growth and reliable revenues,” Infigen said in a statement.