Partners-backed Sapphire Wind Farm secures PPA for 20% of output

Wholesale energy retailer Flow Power will purchase 50MW of Sapphire’s 270MW capacity per year on a ‘10- to 12-year’ power-purchase agreement.

Grassroots Renewable Energy, the Australian renewable energy platform owned by CWP Renewables and Swiss fund manager Partners Group, has signed a long-term power-purchase agreement for almost 20 percent of the capacity of Sapphire Wind Farm.

Grassroots will sell 50MW of the output of the 270MW Sapphire Wind Farm in New South Wales to Flow Power, a wholesale energy retailer that sells electricity to businesses.

Flow Power managing director Matthew van der Linden declined to disclose the price of the deal, but told Infrastructure Investor it was “very competitive and attractive”. He added that the PPA length was in the region of 10 to 12 years, in line with the three other PPAs the company has signed to date.

It has previously contracted to buy 70MW of power from Ararat Wind Farm in Victoria, 50MW from Lakeland Wind Farm in northern Queensland, and 50MW from Kiamal Solar Farm in Victoria.

The Sapphire deal takes Flow Power’s agreements to 220MW in total and forms part of a continuing trend for Australian renewables projects to seek long-term PPAs that underpin investments and reduce merchant pricing risk.

Flow Power plans to sign more PPAs with other renewables schemes, targeting 300MW to 400MW of total capacity by the end of 2018, van der Linden told Infrastructure Investor.

“We plan to announce another three or four deals by the end of this year, with the aim of eventually getting two or three [PPAs] in each state,” he said.

“This allows corporations to sign offtake agreements with us, and by including multiple PPAs they don’t have to get all their load from one wind farm or solar farm and have all their eggs in one basket.”

Flow Power previously stated its ambitions for national growth in February when Canadian pension fund OPTrust acquired a 51 percent stake in the wholesale energy retailer and its sister company Utilacor, executing its strategy of heavily investing in Australia’s renewables sector.

Van der Linden said there was “no shortage” of renewables projects wanting to strike deals and that they had also seen strong demand from customers. Flow Power’s corporate clients include almond producers Olam Orchards and Select Harvests, and tool manufacturer ANCA Machines.

The deal is part of a recent trend for corporate renewables PPAs in Australia, with Grassroots agreeing in August to supply 75 percent of Sydney Airport’s energy from the under-construction Crudine Ridge Wind Farm.

Partners Group’s Murra Warra I wind farm signed a PPA for a “significant portion” of its output in December 2017 to a group of customers including Telstra, Coca-Cola Amatil, ANZ Banking Group, the University of Melbourne and Monash University.

Sapphire Wind Farm, which is billed as the largest wind farm in New South Wales and is already partly operational, has itself signed another PPA with the Australian Capital Territory government for 100MW of capacity. That power will be used by the ACT to reach its goal of 100 percent renewable energy generation by 2020, and the 28 turbines supplying it came online in May 2018.

Partners Group made an initial A$250 million ($177.1 million; €153.3 million) investment in Sapphire in 2016 and it was the seed asset for Grassroots Renewable Energy at its launch in May this year.

Sapphire Wind Farm is scheduled to complete construction this year and will comprise 75 turbines in total, providing enough energy to power 115,000 homes per year.