Trailblazing wind farm snapped up by Spanish renewables giant hoping to free it of grid constraints

Spanish renewables giant Iberdrola has made its third major energy market investment in Australia in just a few months, after agreeing to buy the Ararat wind farm – a trailblazing Victorian project that has been in operation since 2017.

Iberdrola is to acquire 100 per cent of the 242 megawatt (MW) Ararat wind farm from its current owners, Partners Group and OPTrust, according to a statement issued late last week.

Iberdrola says the wind farm, located in Victoria’s Central Highlands region, is expected to benefit from upcoming transmission projects in the state, including a major grid upgrade Iberdrola has been contracted to build.

Iberdrola last month was revealed as the development partner for the planned 500 kilovolt (kV) double-circuit electricity transmission line that will link Victoria’s Western Renewables Link with Project EnergyConnect in New South Wales.  

The renewables giant says it expects the grid upgrade, part of the Victoria to New South Wales Interconnector West (VNI West) transmission project, to increase the Ararat wind farm’s options to export energy.

Ararat has been one of a number of wind farms constrained by network issues, and negative wholesale prices, with its capacity factor falling significantly in the last few years.

Just last week, new constraints were imposed on wind farms in north-western Victoria as a result of efforts by the Australian Energy Market Operator (AEMO) to limit the size of potential “contingencies” on the grid.

The new constraint limits the combined output of generators, located on a troubled part of the grid known as the “rhombus of regret,” to 750 MW. The projects believed to be affected include the Crowlands, Ararat, Bulgana and Murra Warra wind farms.

The Ararat wind farm, made up of 75 GE 3.2 MW turbines, was the largest wind farm in Australia when it was first built and remains one of the largest operational wind farms in the country today.

Led from late-stage development and construction through to full operational status by Partners Group, the project has been underpinned by a 20-year Power Purchase Agreement with the ACT government and an innovative long-term contract with Australian renewables retailer, Flow Power, signed back in 2017.

“We invested in Ararat to capitalise on thematic tailwinds across the Australian wind sector, including ambitious targets for the use of renewable energy and a supportive regulatory framework,” Partners Group managing director of infrastraucture, Nicholas Kuys said on Friday.

“This transaction showcases how we build infrastructure assets that can complement strategic portfolios.”

Iberdrola says its acquisition of Ararat wind farm is part of the company’s 2025-28 plan to invest more than €1 billion in Australia, “focusing on core businesses and markets that offer income stability and predictability.”

In October, Iberdrola agreed to acquire the Tungkillo battery energy storage system in South Australia and was signed up to partner with VicGrid to develop the Victorian portion of VNI West – the company’s first foray into transmission in Australia.

If you would like to join more than 28,000 others and get the latest clean energy news delivered straight to your inbox, for free, please click here to subscribe to our free daily newsletter.