The board of listed company Tilt Renewables has given the go ahead for the $560 million Dundonnell wind farm in Victoria, after the company landed a major 15-year contract with Snowy Hydro for half the output of the 336MW facility.
Tilt announced on Wednesday, at the release of its interim results, that it will now go ahead with locking in finance – including through a $260 million equity raise – and will begin construction of the project early next year and complete it by the end of 2019.
The Dundonnell wind farm will be one of the biggest in the state, and was one of three wind and three solar farms that won a contract with the Victoria government in the largest tender for renewable energy in the country.
That government contract only accounted for 37 per cent of the wind farm’s proposed output, but Tilt on Thursday confirmed it had signed a 15-year contract for half the output with Snowy Hydro, as part of its package of 888MW of “firm” wind and solar well below the price of fossil fuels and current wholesale prices.
Tilt is also working on a number of other significant projects in Australia, including the addition of a 40MW solar farm and a 20MW battery to its Snowtown wind complex in South Australia; the Waddi project in W.A. that could combine 105MW of wind and 40MW of solar; and the Highbury pumped hydro project in an old quarry in the Adelaide foothills.
It has a further three solar projects and a further five wind projects also in the development pipeline
Tilt says that the Dundonnell wind farm will feature 80 Vestas V150-4.2MW turbines, which it expects will deliver a capacity factor of around 42 per cent. Its recently opened 54MW Salt Creek wind farm had delivered a better than expected capacity factor of 48 per cent from July to September.
However, Tilt says the amount of generation lost from its Snowtown facility in South Australia had increased in the last six months, with an estimated 41GWh lost due to the South Australia System Strength constraint imposed by the market operator. That equates to more than 5 per cent of output, which totalled 712GWh in Australia in those six months, mostly from Snowtown.
It says that AEMO and the local transmission provider are working with industry participants on technical resolutions to this constraint – imposed when total wind generation exceeds 1295MW and there is not enough gas capacity on line – with resolution now expected in 2020. These solutions are likely to include synchronous condensers and changes to grid management.
Tilt also noted that the upcoming federal election in 2019 will be another key sign post for investment, with climate change (in response to drought) and energy now ‘live’ issues.
It noted that state government ambitions had been driving investment in Victoria and development in Queensland, although “some less experienced developers” have been caught by transmission limitations and connection requirements, such as these highlighted in Victoria by AEMO.
Note: This story has been updated to reflect identity of the previously un-named buyer of the output.