Windlab dispute with contractors deepens over delays to Kennedy energy hub

Listed renewable energy developer Windlab says it faces another four or five months of delays before its world-leading wind-solar-battery hub at the Kennedy Energy Park in north Queensland is on line, and says it is in dispute with its EPC contractors.

Windlab says the 62MW Kennedy facility – which combines 42MW of wind, 15MW of solar, and 4MWh of battery storage – is already 13 months late and is not forecast by the EPC contractors – Vestas and Qanta Services) to reach full commercial operations for a further four to five months.

Windlab has sought liquidate damages over the delays and its financial impacts in the last financial year, and says the EPC contractors have failed to deliver a “fully-functioning, compliant generator performance standard (GPS), which is essential to gain registration by the Australian Energy Market Operator.

In a statement to the ASX on Tuesday, Windlab says while it is seeking damages from the EPC contractors, they in turn are seeking “milestone” payments and has now taken the dispute for arbitration under the Queensland Building Industry Fairness Act.

“The EPC contractor also made numerous claims for extensions of time and variations against the EPC contract which are not accepted by KEP (Kennedy Energy Park), the statement says.

“Windlab believes that Kennedy Energy Park has recourse under the terms of the EPC contract for these ongoing delays and costs if substantive legal proceedings become necessary.”

The project is the world’s first to combine wind, solar and batteries at such scale in a single facility on a main grid, and was largely complete late last year.

Nearly all new wind and solar projects in Australia are experiencing delays, for a number of reasons but mostly to do with connections and commissioning. Seeking liquidated damages from EPC contractors has become a common sight in the industry, and led to a review of how those contracts are structured.

Neither Windlab nor the contractors have been prepared to discuss the nature of the issues at Kennedy Energy Hub, where a small synchronous condenser has also been installed.