Golden Plains – one of the largest land based wind projects in the southern Hemisphere – has snagged a major global investor, with the investment arm of Ikea franchise owner Ingka Group taking a 15 per cent stake in stage one of the massive project.
The deal with the 756MW Victorian project was announced on Thursday by Golden Plains owner, TagEnergy, as the Netherlands-based Ingka Investments’ first foray into Australian renewables and one of the first deals of its kind.
That’s because it is not so much about Ingka buying energy that Golden Plains produces, which TagEnergy plans to sell on a merchant basis, but rather about investing directly in the development of new renewables as both a good business move and a responsible corporate climate action.
To that end, Ingka Investments gets the renewable energy certificates, or LGCs, generated by its stake in the project, to put towards reducing its own carbon footprint, while also supporting a major new clean energy development.
“We think it’s the first corporate direct investment of capital from outside the energy space, directly investing in the energy space in order to meet their [environmental, social and governance] goals,” says Andrew Riggs, TagEnergy’s managing partner for Australia.
“What we’re seeing here is … other [non-energy] industries that want to accelerate the transition, bringing better capital in and allowing experts like us to create the projects to create the green energy.”
Golden Plains aims to generate a lot of green energy. The $3 billion project based around Rokewood in Victoria’s south west will ultimately grow to include a wind farm of around 1,300MW, as well as a big battery.
Stage one, in which Ingka has taken the 15% stake, will consist of 756MW (122 turbines) with an expected annual production of over 2,000 GWh a year.
TagEnergy and the original developer Westwind are also preparing for construction of stage two (576MW/93 turbines) and a 300MW battery storage facility that will add flexibility and stability to the electricity grid.
TagEnergy – a relatively newly formed development company headed up by Franck Woitiez, the former head of Neoen Australia – itself bought into the project in early 2022, taking a “vast” majority stake for an undisclosed sum.
The company is also behind plans for a massive 300MW/600MWh battery at Mount Fox near Townsville, in Queensland, after securing one of the winning positions in the Australian Renewable Energy Agency battery tender late last year.
“Can you imagine just a few short years ago when the founders of Tag built the Hornsdale big battery … that was 100MW,” says Riggs, speaking to RenewEconomy from an Ikea store in Melbourne on Wednesday. “And we just discussed 600MW like you could buy it downstairs!”
For Ingka Investments, the world’s largest owner of Ikea retail stores, making a move into the Australian renewables market is part of the company’s recent pledge to invest €6.5 billion in renewable energy, and to reach net zero by, or before, 2050.
Already, since 2009, Ingka Investments has tipped more than €3 billion into wind and solar projects worldwide, enabling the group to generate more renewable energy than it consumes across its global operations.
“It’s about doing good business, but being good business as well,” says Ikea Australia CEO and CSO Mirja Viinanen.
“Thinking about the future generations to come and how we as, not only a retail company, but over all the companies, should actually think in the long term… and start to invest in environmental and sustainable projects.”
Stage one of Golden Plains reached financial close in November 2022 and all construction contracts are underway, with Vestas locked in to supply and install the turbines. The wind farm is expected to be fully operating by the end of 2025.
On the project’s battery, Riggs says TagEnergy is “in procurement” for that at the moment, and hopes to bring it to market in about 12-24 months.
He says that given the ultimate size of the two stages of wind farm at Golden Plains, the battery would be used to provide stability services while also earning revenue for the company through the provision of other services to the broader grid.
“Rather than buying an old school synchronous condenser, we’d rather buy a battery, which can do the same role and actually then have some revenue from it as well,” Riggs told RenewEconomy.
“We’ll very much leverage what we’re doing [in North Queensland [for the Mount Fox big battery] to then provide the same services here in Victoria.”
Closure of the deal between Ingka and TagEnergy is subject to approval by the Foreign Investment Review Board.
