Telstra flags plans to underwrite 300MW of new solar, wind | RenewEconomy

Telstra flags plans to underwrite 300MW of new solar, wind

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Telstra is preparing to tender for another 300MW of new solar, wind – this time in the NSW market – to further cut its exposure to volatile grid prices.

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Telstra is reportedly preparing to issue a request for tenders to develop 300MW of new solar and/or wind power in the New South Wales market, to boost its renewables portfolio and cut its exposure to volatile grid prices.

The move is not altogether unexpected – the telco has been vocal about its intentions to support further renewables development around Australia since the completion of its first large-scale project, the 68MW Emerald solar farm built by RCR Tomlinson for RES Australia in Queensland.

Telstra takes all of the output from the Emerald project – a move, the telco said back when the contract was first signed, that was about becoming an active participant in the energy market, to cut costs and help build resilience in national electricity market.

It has since contracted to share in the output from the first 226MW stage of the Murra Warra wind farm in Victoria, as part of as part of a consortium of other corporate buyers.

That deal was celebrated by Telstra, not just for its (undislosed) low contract price and big project size, but because of the collaboration with other  major energy users.

“From our perspective it’s a clear win, win – indeed it’s a win, win, win,” Telstra’s James Garraty said at the time. “We get to lock in costs for one of our major inputs, energy, for the long term at well below current prices.

“We are supporting a high quality renewable energy project in a regional community that will generate enough electricity to power almost 220,000 Victorian homes.”

According to a report on Thursday, Telstra going in to the next round of projects as part of a consortium, too, and is expecting to take between 30-40 per cent of the power generated by the mix of solar and wind that results from the NSW tender. Contracts for the power purchase agreements are expected to be done by the end of this year.

“We sit there and look at high prices and we look to the things that would naturally bring those things into control and we don’t think they are operating well at the moment,” Telstra’s renewable energy manager Wes Ferguson told The Australian.

“So we have made a conscious effort to go into the market to try and promote the behaviour necessary to bring prices down. Everything we are doing is to drive prices down — because that’s where our benefit comes from, both for us and our customers.

“There will be people out there with projects that are looking for this sort of certainty to derive debt and equity to get the financial close. And what we will be doing is providing that financial security,” Mr Ferguson said. “So it’s a stimulus for the industry in NSW as well.”

“The industry across Australia is struggling because there are a lot of challenges in building new projects today. There’s problems with connection of these assets to the grid — that’s their biggest problem,” Mr Ferguson said. “We can put our balance sheet behind securing that power for a long period of time which gives investors on the other side some surety.”

RenewEconomy has contacted Telstra to confirm the upcoming tender, but did not hear back before publication.

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