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.
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.