WA's Synergy to bring in Dutch fund to bankroll wind and solar farms | RenewEconomy

WA’s Synergy to bring in Dutch fund to bankroll wind and solar farms

Print Friendly, PDF & Email

WA government owned utility Synergy looking to bring in outside investors to bankroll investments in new wind and solar farms and meet RET obligations.

Collgar wind farm.
Print Friendly, PDF & Email
WA's Collgar Wind Farm
Collgar wind farm in WA

The West Australia government owned electricity provider Synergy is making a belated move to meet its renewable energy target obligations, reportedly bringing in a Dutch investment fund to help bankroll investments in new wind and solar farms.

WA energy minister (and treasurer) Ben Wyatt this week approved plans for Synergy to create a green power fund, and bring in institutional investors – in much the same way that AGL Energy did with its Powering Australian Renewables Fund (PARF).

Reports in WA media suggest one investment partner in the new fund will be the Dutch Infrastructure Fund, which has already invested in projects such as the 220MW Bungala solar project in South Australia.

DIF has also invested in the 125MW Clare solar farm in Queensland, as well as the 20MW Royalla solar farm in the ACT – the first utility-scale solar farm in the National Electricity Market.

As we have reported here, investment in new wind and solar plants came to a standstill in WA – partly due to the country-wide investment strike as the Abbott government sought to kill the renewable energy target, and partly because of the state Coalition government’s own antipathy to renewables.

The then Barnett government could barely hide its disdain for renewable energy, even go far as stating in 2013 that it would rather see wind and solar farms built in other states – and have WA consumers subsidise their construction – rather than built in WA.

Instead, they spent $310 million on a disastrous upgrade for the ageing coal-fired generators at Muja in Collie which will have to be closed anyway.

The result was that just 2.6MW (yes, two point six megawatts) of large-scale renewable energy was built in WA from the start of 2014 to the end of 2016 (see table below).
aemo wa renewable installs

Now there is estimated to be a pipeline of more than 1,000MW of large scale wind and solar projects waiting to be built. Some are going ahead because they are being supported by ARENA, or have contracts with corporate buyers, but the rest have been waiting for Synergy to act.

The creation of a special purpose green fund means that, like AGL, Synergy would not have to use so much of its own money (in this case taxpayer funds) to invest in the new projects, although it will have to share the earnings (but not the renewable energy certificates that they will generate).

However, the move is not without controversy, as some independent developers were preferring to get contracts with Synergy, and fund the developments themselves. They fear they may be crowded out of the market by this new fund.

The West Australian reported that the Albany and Grasmere wind farms will be put into the new fund,  along with the Greenough River solar project near Geraldton, which will likely quadruple in size from 10MW to 40MW.

The Warradarge wind project, possibly up to 240MW, may also be put into the fund, which will enable any monies to go “off balance sheet”, and make it easier for the cash-strapped state government to finance.

Without the new projects, it is estimated that Synergy was facing a potential bill of $463 million to meet its RET requirements – much of it to buy certificates from projects in other states. Which, given the resources in W.A., would be completely daft.

RenewEconomy sought to confirm the report with Synergy but had not heard back by the time of publication.



Print Friendly, PDF & Email

  1. Dave 3 years ago

    Good news, but are there no LOCAL sources of investment ( super funds etc ) ??
    Should we not be keeping the money ( profits etc ) actually in Australia ?
    Can the Govt. not borrow the money at these record low rates, to finance this build, and then pay down the loan with the profits / returns the project would generate ??
    Would also provide a nice little income stream for the coffers.

    What am I missing here ?

    • George Darroch 3 years ago

      You snooze you lose. Synergy were likely approached with an offer they couldn’t refuse.

      • Dave 3 years ago

        Really annoys me that here is just another example of profits being siphoned offshore.

        And we wonder why we are broke………………..

        • ZeroEmissionsNoosa 3 years ago

          you would think investments like this would be no brainers for super funds to participate in – long term stable income with zero volatility of fuel prices. So what happened here? Weren’t local investment houses asked or weren’t they interested. Or is the headline a little on the click bait side, and Synergy just one of the investors in the green power fund which has been announced. Sorry Giles – too many unanswered questions….

  2. Ken 3 years ago

    And this will help lower energy prices how ?
    Answer is it won’t.

    This monopolistic government protected entity needs to be opened up to real competition and broken down ( but the government won’t do this as it will lose its dividend from the loss making enterprise that it is) so that private generators and retailers can offer the long suffering customers of Synergy a better deal.

    The markets for domestic energy has been deregulated is other states but not in WA.

    The gas retail market has been deregulated and the benefits are there to see,, lower prices from more competition.

    Something stinks in WA when it comes to government poor decisions and lack of action in areas where real competition will benefit the long suffering sandgropers.

    • Alastair Leith 2 years ago

      There’s a gas glut in WA, hence cheaper prices.

  3. Andrew Woodroffe 3 years ago

    Spot prices for LGCs are still, after a year or so, above $80 – a windfarm this big ought to cost below $100/MWh – the value may be considerably more; LGCs (especially in the short term), raw electricity and capacity credits. LGCs will be much, much cheaper in a long term PPA than buying on the spot market

    Prices, regulated once a year, ought to be going down. Non contestable customers, ie householders, are currently paying $265/MWH (inc GST).

    Questions need to be asked about the massive difference between the cost of generation (~$100/MWh) and what we are paying, $265/MWh!

Comments are closed.

Get up to 3 quotes from pre-vetted solar (and battery) installers.