Queensland coal giant buys construction-ready wind farm once rejected by federal Coalition

A central Queensland wind farm once sent back to the drawing board by the federal environment minister is now heading into construction, under the ownership of the state’s biggest publicly owned coal generator – and bought with the help of coal royalties.

Danish renewables giant Copenhagen Infrastructure Partners confirmed on Thursday that is has sold the 285MW Lotus Creek Wind Farm to Queensland government-owned CS Energy, bringing the project to financial close.

Details of the transaction have not been disclosed, but Queensland budget documents note that $300 million of state coal royalty revenue was put towards “100 per cent public ownership of the $1.3 billion 285-megawatt (MW) Lotus Creek Wind Farm … supporting decarbonisation in Central Queensland.”

The project, north of Rockhampton and near the town of St Lawrence, has a complicated pedigree. It was originally proposed at 200MW by developer Epuron, before that company and its assets were bought up by Ark Energy, the Australian renewables subsidiary of Korea Zinc.

Development progress hit a wall back in mid-2020, when it was rejected by the federal Coalition government for posing a threat to koala habitat. At the time, then federal environment minister Sussan Ley ruled the project would have “clearly unacceptable impacts” on koala populations and other listed threatened species including the greater glider.

In late 2021, Epuron – soon to be bought out by Ark Energy – put in a revised development application for the wind farm, with a redesign of the project’s layout, a reduction in the number of turbines and an increase in total generation capacity.

CIP then bought the project from Ark Energy in December 2022, around about the time it was given the green tick by the current federal Labor government under the Environment Protection and Biodiversity Conservation Act.

To add another level of complexity, Vestas Development Australia was CIPs project development partner for Lotus Creek over this period, and was instrumental in ushering the project through the approvals process and getting it to financial close – marking a first for that entity.

Construction of the project – the final design has landed at 46 turbines and 285MW – will now go ahead under the full ownership of CS Energy, marking a first for the company, which owns and operates the Callide B and Kogan Creek power stations, and has a 50% interest in Callide C Power Station.

“The Lotus Creek wind farm will be CS Energy’s first 100 per cent owned wind asset and is a key part of our strategy to develop up to 700 MW of wind generation in Central Queensland,” said CS Energy CEO Darren Busine in a statement on Thursday.

“This project will support the growing demand for renewable energy from our large commercial and industrial customers and demonstrates our ongoing commitment to the region.

“We look forward to working with CIP through the construction of Lotus Creek Wind Farm, and further collaboration on large-scale generation and storage projects in Queensland.”

Construction of Lotus Creek wind farm will be overseen by CIP, with Zenviron contracted to deliver the electrical and civil balance of plant, along with the establishment of a workers’ accommodation facility. The project is expected generate around 400 construction jobs and 10 – 15 ongoing operational jobs.

Vestas will supply and install the 46 V162-6.2 MW wind turbines, from its EnVentus platform, and provide long-term management and servicing of the project.

CIP says the wind farm is expected to reach commercial operations in 2027 and, once fully commissioned, will generate enough clean energy to power the equivalent of around 150,000 average Queensland homes.

“CIP will play an important role in growing the local pipeline of large-scale, commercially strong, and responsible clean energy projects through its global investment base and recognised expertise,” CIP partner and head of Australia, Jørn Hammer, said on Thursday.

“We look forward to helping CS Energy deliver its first 100% owned wind farm and working with other local asset owners and operators as we progress our multi-GW Australian pipeline.”

Evan Carless, the vice president of Vestas Development Australia says Lotus Creek showcases the company’s ability to bring greenfield projects to commercial and planning maturity.

“A key to this project’s success has been nurturing valuable relationships with the Traditional Owners, landholders, the local community and our dedicated team of consultants,” Carless says.

According to the project website, the Lotus Creek site features strong winds, access to high voltage transmission lines and good road access with few neighbouring properties.

“Wind monitoring has shown a very promising wind resource, with wind speeds strongest overnight when solar farm generators are not operating, showing a potential to provide a valuable contribution to Queensland’s generation mix and support a large input of clean renewable energy into the network,” it says.