Australian state awards long-term contracts for 928 MW capacity in first renewable energy auction

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Australian state awards long-term contracts for 928 MW capacity in first renewable energy auction

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The Australian state of Victoria, located in the south-east of the country, has awarded Support Agreements to six renewable energy projects with 928 MW cumulative capacity in its first renewable energy auction.

Under the agreements, the successful developers will have a 15-year contract with the Victorian Government to supply electricity to the network under a contract for difference price mechanism.

The six projects are expected to generate AUD1.1 billion (US$782.5 million) of economic investment in regional Victoria, create more than 900 jobs and produce enough electricity to power 646,273 households. Furthermore, they will drive a 16% reduction in Victoria’s electricity sector greenhouse gas emissions by 2034/35.

The winning projects are the:

  • 180 MW Berrybank Wind Farm, owned by Global Power Generation, a subsidiary of Naturgy

Planning permits issued in February this year indicate plans to install 41 turbines in Golden Plains Shire and 38 turbines in Corangamite Shire. The wind farm is expected to start operations in the second half of 2020 and will entail a total investment of AUD259 million (US$184.2 million).

  • 100 MW Carwarp Solar Farm, owned by Canadian Solar

Canadian Solar disclosed plans to develop this project in March this year, after signing Memorandums of Understanding (MoU) to set up a renewable energy research centre and training programs in Mildura. The solar plant is to be installed in the south of the region.

  • 34.2 MW Cohuna Solar Farm, owned by Enel Green Power Australia

Enel expects to invest around US$42 million in the solar facility, which is due to enter into commercial operation by the end of 2019. The project is co-developed with the local developer Leeson Group and is located in the Shire of Gannawarra.

  • 336 MW Dundonnell Wind Farm, owned by Tilt Renewables

The Support Agreement covers approximately 37% of the output of the wind farm, 29 of the 80 turbines to be constructed. Construction is expected to begin early in 2019, pending a final investment decision to proceed to Financial Close, expected in late 2018. The total construction cost is expected to be approximately AUD560 million (US$398.4 million).

  • 157.5 MW Mortlake South Wind Farm, owned by Acciona

Designed with thirty-five 4.5-MW Nordex turbines, the wind farm will generate clean energy equivalent to the electricity consumption of almost 80,000 Australian households, avoiding the emission of over 532,000 tonnes of CO2. Construction work will begin in early 2019 and completion is expected in mid-2020. The wind farm represents capital expenditure of AUD288 million (US$204.9 million).

  • 85 MW Winton Solar Farm, owned by Fotowatio Renewable Ventures (FRV)

FRV received Development Approval for the project from the Benalla Rural City Council in May this year. It is envisaged that construction could commence sometime in late 2018 and be completed in around 12 months. The solar plant will have an operating life of around 30 years.

Launched in November 2017, the auction was initially expected to deliver around 650 MW of renewable energy. In March, the state government revealed that it had received applications for projects with over 3,500 MW capacity altogether.

The auction is part of the Victorian Renewable Energy Targets (VRET) scheme, which will ensure that 25% of the state's electricity generation comes from renewable sources by 2020, and 40% by 2025.

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