Telstra inks new wind farm PPA as it prepares to launch energy retail offer

A 58MW wind farm is set to be built near Goulburn in New South Wales after a power purchase agreement underpinning the project was signed between international developer Global Power Generation and Australian communications giant Telstra.

A statement from Spain-based utility Naturgy on Friday said that the long-term PPA negotiated via its subsidiary GPG had committed Telstra to procure 80% of the energy generated by the wind farm, called Crookwell 3. The remainder of the energy generated by the project would be sold by GPG on the wholesale market.

The new renewable energy offtake deal comes as Telstra gears up to launch what could be a major challenge to Australia’s incumbent energy utilities, submitting applications to regulators for approval to sell gas and electricity as early as late June.

Telstra has been working up to this moment for several years, ever since it poached Powershop CEO Ben Burge to lead a new energy division, and analysts have speculated it could have $20 billion to spend if it is really serious about the new venture.

The PPA marks Telstra’s third in Australia, starting with the 2017 deal with the 68MW Emerald solar farm built by RES Australia in north Queensland, which committed the telco to buy that project’s entire output.

Telstra then led a consortium of other corporate buyers in a deal to take the output from the first 226MW stage of the Murra Warra wind farm in Victoria, later that same year.

In a statement on the Telstra Exchange blog on Friday, CEO Andrew Penn said that the new wind farm, once in operation, would take the telco more than halfway to its goal of 100 per cent renewables by 2025.

“Crookwell 3 joins our stable of renewable energy investments, and when combined with Murra Warra Wind Farm and Emerald Solar Farm, will supply more than 150,000 homes’ worth of non-renewable electricity consumption each year,” Penn said.

“By 2025, our plan means we will own or contract renewable energy generation equivalent to 100 per cent of the energy we consume in all of our operations. That includes running our network, buildings and data centres.”

For Naturgy, the Crookwell 3 wind farm will be its sixth investment in Australia through GPG – including Crookwell 2 – amounting to 750MW of renewable energy generation projects with secured PPAs.

GPG is also behind the 97MW wind farm just outside the Victorian Western District town of Hawkesdale which was last month taken to the Supreme Court by a group of locals hoping to have the planning permit for the project revoked, just as construction was about to begin.

Crookwell 3 – which itself did not have an easy path to development – is set to begin construction in the last quarter of 2021, with the aim of being fully operational in the first half of 2023. It is expected to generate the enough electricity to power the equivalent of 40,000 households.

It will also create roughly 95 direct jobs during the construction phase and a further six permanent jobs to support the ongoing operations of the wind farm, Naturgy said.

Telstra’s Penn said on Friday that he believed big businesses had a responsibility to be good climate citizens, to have an emissions reduction strategy and to set an example for others.

“As one of the biggest energy users in the nation, it matters when we take action to both decarbonise our operations and clean up the grid for the future,” he said.

“Climate change is everybody’s business and there are no sidelines for any of us to sit on when it comes to meaningful action. It affects every business; every industry and every person on this planet, and to do nothing risks everything.”