Tasmania’s Granville Harbour wind farm reaches financial close

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A 112MW wind farm that will deliver a one-third increase to Tasmania’s wind power capacity has reached financial close, after an investment from the CEFC.

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Woolnorth wind farm, Tasmania
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Woolnorth wind farm, Tasmania

A 112MW Tasmanian wind farm that will deliver a one-third increase to the state’s wind power capacity has reached financial close, after an investment from the Clean Energy Finance Corporation.

The CEFC said on Thursday that it had committed $59 million to the $280 million Granville Harbour wind farm, being developed by Palisade Investment Partners on a cattle farm on Tasmania’s west coast.

The project was initially developed by Westcoast Wind, which was bought out by Palisade in February 2018, some months after the two companies negotiated a long-term PPA for the wind farm’s output with Hydro Tasmania.

In January, when construction on the wind farm began, Hydro Tasmania said that Granville Harbour would contribute to its plans to double the Apple Isle’s renewable energy capacity and make it the Battery of the Nation.

The Acting CEO of Hydro Tasmania, Gerard Flack, said the business would buy about 360 gigawatt-hours of energy and renewable energy certificates a year from the wind farm.

Palisade – which is also behind the Hallett and Waterloo wind farms in South Australia, and the 148MW Ross River Solar Farm in Queensland – said Granville would be funded through equity from its own renewable energy fund (PERF) and from the CEFC.

It will also take the company’s PREF portfolio half way to its 1GW target, with the energy generated from the portfolio enough to power over 200,000 homes and abate 645,000 tonnes of CO2 per year.

“Granville Harbour Wind Farm demonstrates Palisade’s hands-on approach to renewables investment and further diversifies our renewable energy portfolio,” said managing director and CEO Roger LLoyd.

“Palisade’s involvement through the development phase to financial close enables us to maximise risk-adjusted returns for our investors.”

For the CEFC, which alongside Suncorp is an institutional investor in Palisade’s PERF portfolio, the Granville commitment marks its largest investment in Tasmania, and first in a Tasmanian wind project.

“Tasmania has a great track record in renewable energy through its investment in hydro resources,” said CEFC CEO Ian Learmonth on Thursday.

“We’re excited to be involved in a project that will further diversify the Tasmania’s clean energy to include more wind, while helping Tasmania achieve its target of 100 per cent renewable energy by 2022.”

CEFC wind sector lead Andrew Gardner said Granville Harbour was part of an increasing
focus by the green bank on greenfield wind energy projects in the island state, which will see “considerable investment” over coming years.

“This project will create regional employment opportunities both during and after construction. It will also deliver ongoing benefits through community investment funds and associated improvements in local infrastructure,” Gardner said.

“Nationally, we have now invested more than $760 million in 11 wind projects, delivering a combined capacity of more than 1.76GW of new clean energy.

“Wind remains the most cost effective new clean energy source, with projects like Granville Harbour Wind Farm benefiting from a strong wind resource and ongoing wind turbine technology improvements to better harness the resource.”

Elsewhere in Tasmania, the CEFC has invested more than $16.4 million in clean energy projects, including tailored finance for more than 140 smaller-scale projects via specialist co-financing programs with major banks.

These programs provide finance for a range of eligible renewable and energy efficiency projects, largely to small and medium-sized businesses.

For Granville Harbour, the project’s 31 3.6MW wind turbines will be supplied by Vestas, with commercial operations scheduled to commence in Q4, 2019.

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14 Comments
  1. George Darroch 4 months ago

    Another vote of confidence in Tasmania’s future as an energy exporter.

    • Rod 4 months ago

      Yes, the more wind they build the better the argument gets for another interconnector.

  2. Andy Saunders 4 months ago

    Given a new Basslink is years away, this mostly provides Hydro Tas a way to conserve water in the storages.

    Which is good, I guess, if not too financially lucrative.

    • David Osmond 4 months ago

      Could be lucrative… in the first half of this year, when wholesale prices in Vic were over $120/MWh, Tassie exported on average 280 MW during those periods when Basslink was still running. So it seems plenty of room on Basslink for more exports when Vic prices are high. An extra 45 GWh of internal generation in Tassie in those 6 months would enable them to increase exports to 500 MW during these periods without running dam levels down. That would have earned $7 million at an average price of $164/MWh.

      • Andy Saunders 4 months ago

        Hmmm, say 14m annualised, on capex of 280m, or a 5% yield… Not sure, their cost of capital is probably somewhere around 6%, running costs and other revenue. Maybe ok, depends.

        • David Osmond 4 months ago

          Sorry Andy, should have added some extra info. This wind farm will probably supply around 400 GWh/y. In the ~4 months during the first 6 months of this year when Basslink was running, an extra 45 GWh could have brought exports up to 500 MW when Vic prices were over $120/MWh. So I didn’t mean to suggest the $7 million would be the total revenue of the wind farm in those 6 months, it is clear that the wind farm will generate far more than those 45 GWh. I meant to point out that boosting Tassie exports when Vic prices are high could yield prices of order $164/MWh (minus Basslink costs and transmission losses), which is obviously way higher than a wind farm needs to be profitable.

    • Nick Kemp 4 months ago

      I have an ideological view that Tasmania should only ever be exporting electricity. I suppose that while coal is still in the mix we might use some base load power to pump hydro but given we don’t pump hydro at the moment then shouldn’t Basslink be a one way street?

      • Andy Saunders 4 months ago

        Not sure why that ideological view makes sense.

        If storage enables greater non-hydro renewables, and Tasmania is the best/cheapest place for storage, then 2-way Basslink flows are good for the system and for emissions. Which after all, don’t hang around any one state but have global effects.

        • Nick Kemp 4 months ago

          My thinking is simply that when all Tasmanian electricity comes from renewables and we have our own hydro why would we import any? Generally speaking I would expect we would have enough or excess electricity.

          I know at the moment we don’t generate all our own all the time but when we do what would the circumstances be that we would be importers?

          • Andy Saunders 4 months ago

            “what would the circumstances be that we would be importers?”

            When there’s low-priced power in mainland NEM. And re-export it when prices are higher. That way some renewables might avoid curtailment, there’ll be lower emissions, and someone in Tasmania (Hydro…) makes some money.

          • Nick Kemp 4 months ago

            Thanks

          • Garth Power 4 months ago

            “Generally speaking I would expect we would have enough or excess electricity.“
            Tas don’t generate enough RE to be self reliant unless you have an exceptional wet year.

            Tas need a total of 1,000 MW capacity of wind to be self sufficient but without pumped hydro some will be spilt/curtailed during wet periods such as low demand/overnight wet winter.

            They will still need FF/import during summer due to the way small storage Hydro works unless they have PHS.

            https://www.hydro.com.au/clean-energy/secure-energy

  3. RobertO 4 months ago

    Hi All, I look at this project and say, “Yes good idea”
    Wind farm is planning on making a profit (good)
    Tas Hydro has bought the electricity and will resell it making a profit (good)
    Bass link may transport some of this electricity at a profit (good)
    Some side effects which could happen. Tas Hydro currently uses some FF to produce electricity, will this slow down (if it does that is good). Tas Hydro has to manage rainfall storage, this may make it easier to keep storage in droughts (good).

    Questions I cannot answer is will it reduce the number of times BassLink switches from export to import to export. I suspect there will be a drop in the number of switches. Will it make BassLink almost an exporter only. The answer depends on rainfall and wind (and Tas Hydro in how and what they do).

    I do know that wind and hydro are very good matches. Their ramping abilities are good (not a 100% match but close enough).

  4. David K Clarke 4 months ago

    I don’t think Palisade has any connection to any of the Hallett wind farms; they do own Waterloo and Cathedral Rocks.

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