A near 12-month investment drought in large scale renewable energy in Australia has been broken after Canberra-based Windlab secured a $50 million financing deal for a 19.5MW wind farm in Victoria.
The financing of Coonooer Bridge wind farm west of Bendigo comes after it became one of three winners of a reverse auction held by the ACT government – delivering a locked in price of $81.50 for 20 years.
Roger Price, the CEO of Windlab, says the project will deliver the cheapest wind energy in Australia, beating even the highly rated Snowtown projects owned by New Zealand firm TrustPower in South Australia.
Snowtown reportedly delivered electricity in its first year below $80/MWh, but Coonooer Bridge will effectively deliver electricity at below $70/MWh in its first year.
“At $81.50 fixed for 20 years, this electricity is more than cost competitive with any form of new build conventional generation,” Price said in a statement on Tuesday. “It’s a phenomenal resource,” he told RenewEconomy later.
The financing will come from Japan’s biggest wind farm company Eurus Energy, which will emerge with an 80 per cent stake in the project, in exchange for providing the upfront equity. Eurus also owns the 50MW Hallett 5 wind farm, and about 2.4GW of wind farms in Europe and Asia and the Americas.
About 70 per cent of the cost of the wind project will be bank finance provided by ANZ.
Windlab will retain about 16 per cent of the project, while around 30 neighbours of the 6-turbine wind farm will own 4 per cent, under an innovative community ownership program we wrote about here.
“This is a win-win for the local community which wholeheartedly supports this development, for our company, for the residents of the ACT and all who support renewable energy,” Price said.
“This location has both strong and consistent winds. It will produce energy nearly 90% of the time and these conditions have attracted our major international investor, Eurus.”
ACT environment minister Simon Corbell, who has masterminded the push to 90 per cent renewable energy in the ACT by 2020, and driven much of the large scale renewable investment in Australia in recent years, said the project will set new standards for local community engagement, and a new benchmark in Australia for low-cost renewable energy.”
The other wind farms to secure feed-in tariffs under the auction held by the ACT government are French-based Neoen, in conjunction with Australia’s Megawatt Capital, who will build a 100MW wind farm at Hornsdale in South Australia, and RES Australia and GE, who are building the Ararat wind farm.
Mark Schneider, from Megawatt Capital, said financial close was expected in July, with the project to be completed by early 2017.
These are the first major wind energy projects to be financed in Australia since the election of the Abbott government, its appointment of climate science denier and pro nuclear advocate Dick Warburton to head a review of the renewable energy target, and its subsequent efforts to cut the target by nearly half.
Windlab has selected Vestas as both the EPC contractor and wind turbine supplier for the project. Windlab will continue to manage the project through its global operation centre based in Canberra. Coonooer Bridge will begin construction soon and is expected to be completed early next year.