The government of Victoria has announced the winners of its Renewable Energy Auction Scheme, bidding out almost 45 percent more power than it had originally intended.
The six winning bidders for three wind farms and three solar projects will generate 928MW of electricity, far above the 650MW target the Victorian government was aiming for.
The winners include the Dundonnell Wind Farm, one of the largest proposed wind farm projects in Australia, which is being developed by ASX-listed Tilt Renewables. Tilt is subject to a take-private bid from two of its biggest shareholders, Infratil and Mercury.
The projects together will produce enough electricity to power 646,723 households each year, helping drive a 16 per cent reduction in Victoria’s electricity sector greenhouse gas emissions by 2034-35, the government said in a statement. The combined projects will see 158 new wind turbines and approximately 670,000 new solar panels installed across the state.
Winners were named through a reverse auction, with contracts for difference to be signed with each winning bidder lasting 15 years. These entitle the winner to be paid the difference between its agreed strike price and the wholesale electricity price, or vice versa with the winner paying the government should the wholesale price fall below the strike price.
The tender for the auction set indicative strike prices at A$56.51/MWh ($40.13; €34.66) for wind projects, A$53.06/MWh for fixed plate solar projects, and A$56.85 for single axis tracked solar projects.
The decision to award a higher amount of power than intended underlines investor interest in Australian renewable energy projects despite uncertainty over the federal government’s energy policy following the scrapping of the National Energy Guarantee.
The state of Victoria has a legislated target for renewable energy generation to be 25 percent of electricity generation by 2020 and 40 percent by 2025. Representative body the Clean Energy Council praised the reverse auction and the Victoria Renewable Energy Target scheme as providing “long-term certainty for investors”.
The winning bidders are:
• Berrybank Wind Farm, west of Geelong, owned by Madrid-headquartered Global Power Generation. GPG is 75 percent owned by Spanish utility Naturgy and 25 percent owned by the Kuwait Investment Authority through its subsidiary Wren House Infrastructure. Berrybank has a nameplate capacity of 180MW.
• Carwarp Solar Farm, south of Mildura, owned by Canadian Solar Australia, a subsidiary of NASDAQ-listed Canadian Solar. It has a nameplate capacity of 122MW.
• Cohuna Solar Farm, east of Kerang, owned by Italy-based Enel Green Power, with a nameplate capacity of 34MW. EGP is also developing the 275MW Bungala Solar project in South Australia alongside the Dutch Infrastructure Fund.
• Dundonnell Wind Farm, north-east of Warrnambool, owned by ASX- and NZX-listed Tilt Renewables. Dundonnell is one of the largest proposed wind farm projects in Australia and has a nameplate capacity of 336MW. Tilt Renewables, which holds 11 percent of Australia’s installed wind capacity, is currently the subject of a take-private bid from two of its shareholders, Infratil and Mercury.
• Mortlake South Wind Farm, south of Mortlake, owned by Acciona Energía, a subsidiary of Spanish infrastructure giant Acciona. It has a nameplate capacity of 158MW and will be the fifth wind farm owned and operated by Acciona in Australia. The firm will invest A$288 million in the project.
• Winton Solar Farm, east of Benalla, owned by Madrid-headquartered Fotowatio Renewable Ventures. Winton will be the company’s fifth solar farm project in Australia.
The projects are at various stages of development, but slated to begin construction in 2019.