Wind can deliver “offshore scale” projects for “onshore price” in inland Australia, Spanish giant says

The Australian head of Spanish renewables giant Acciona says parts of inland New South Wales and Queensland could host wind energy projects at an “offshore scale,” but for an “onshore price,” even with the added cost of connecting back to the transmission network from far-flung locations.

Brett Wickham, managing director of Acciona Energía Australia, says that as more and more of the best spots for onshore wind farms are filled – that is, those closest to major transmission lines – developers are looking further afield for new generation potential.

Wickham says this is possible thanks to the ultra-cheap cost of onshore wind generation, not to mention solar, as well as the falling costs of firming using battery storage.

He uses the MacIntyre wind farm as an example, the 923 megawatt (MW) project Acciona has developed with Ark Energy outside Warwick in south-western Queensland – currently Australia’s largest operating wind farm.

“[For MacIntyre] we went 100 kilometers away from the grid and have built 1000 megawatts. Now, 1000 megawatts will pay for your connection,” Wickham told the conference in Melbourne.

“We’re also seeing in far western New South Wales, far western Queensland … [that] we can build … offshore scale at an onshore price in those sorts of areas, but we’re going to need to be able to connect back to the grid.

“In the case of western New South Wales, we can probably put 10, 15, 20 gigawatts (GW) out there where there’s very low social license impacts,” he said.

“And I mean, you talk about the cost; we’re producing wind at the moment for somewhere between 9 to 10 cents a kilowatt-hour, delivered out the gate.

“And even if I’m firming that … it’s only adding a few more cents onto that. So those are the sort of numbers we’re talking about… [and] you know that cost improvement is getting better all the time.”

Wickham says that since Acciona built its first wind project in Australia – Cathedral Rocks in South Australia about 20 years ago – it has built another five wind farms and has another roughly 1,500 megawatts (MW) under commission, including MacIntyre.

He says that while there has been no shortage of policy turmoil over that 20-year period, building projects in Australia is becoming less and less dependent on the whims of different political parties and more and more connected to the long-term plans of business and industry.

“Even though the politicians … can’t find that common ground, which is one of the biggest challenges we have, what we’re certainly seeing is plenty of appetite from large [commercial and industrial} customers – the bps, Rio [Tinto]s, Woodsides – to try and, I guess, focus on becoming carbon neutral.

“So in spite of the politicians, I still see a bright future for us here in Australia.”

There are still some road blocks, however, in particular around the long delays to the planning and approvals process for new projects, both at the state and federal level.

“That’s my greatest checkpoint at the moment,” Wickham says. “I’ve got plenty of projects, I just can’t get them to market quick enough. I’ve got people wanting [power purchase agreements] and so forth … and I’ve got capital wanting to come in and take FID on projects, so the planning and the environment areas remain a lot of the biggest challenges.”

Nevertheless, Wickham says Acciona remains “entirely committed” to investment in renewable energy projects in Australia, with a pipeline about 15,000 megawatts under development across numerous states.

“So we’ve made a long-term commitment to Australia, and I guess Australia remains probably our number one investment destination across both infrastructure and energy,” he told the conference on Thursday.

“It used to be [Australia] and the US, but Mr Trump has slowed down the US a little bit over there,” Wickham added.

“But we still have an appetite for investment here in Australia … and remain entirely committed to it. So we hope the transition continues, in spite of the political environment.”

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