August 18, 2017
After years of speculation, community consultations and funding uncertainty, the $850 million Coopers Gap wind farm has received its final green light.
AGL Energy announced on Thursday that the financial agreements for what will become the largest wind farm in Australia have been completed.
Construction on the 453MW project – which will consist of up to 123 towers – will begin later this year and is expected to be completed by mid-2019.
An AGL spokesman said the company had closed a $22 million deal with the Powering Australian Renewables Fund (PARF).
Construction will be funded through a combination of PARF partners’ equity and a lending group consisting of Westpac, Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Financial Group, Societe Generale, DBS Bank, Mizuho Bank and ABN Amro.
A joint venture consisting of GE and Catcon have already tendered successfully for the engineering procurement contract.
This joint venture will develop the wind farm in conjunction with AGL.
Queensland Treasurer Curtis Pitt welcomed AGL’s announcement.
He said the project was a vote of confidence in Queensland’s energy sector.
“Renewables are now undeniably the cheapest form of new generation to build, and this project is also proof that costs continue to fall – with AGL confirming a cost of less than $60 per MW/h,” Mr Pitt said.
He said the arrangements for connection of the wind farm to Powerlink’s electricity grid were in place and a new substation would also be built.
AGL Manager Project Development Evan Carless said the project would provide significant direct and indirect investment to the region.
“Up to 200 jobs will be created during the peak of construction and up to 20 jobs once operational. We are excited about what this means for the local community during and post-construction,” he said.
“As the project has now achieved financial close and is moving from development to construction phase, AGL’s Tim Knill will assume responsibilities as Construction Project Manager for the wind farm.”
Economic development organisation Toowoomba and Surat Basin Enterprise (TSBE) also congratulated AGL on closing its financial agreements over the wind farm.
A spokesperson said TSBE had spent 14 months working behind the scenes with AGL and would continue its work with contractors in the region.
TSBE has been working closely with Councils and members to ensure local content from suppliers can be sought wherever possible.
Executive chairman Shane Charles said the project was a great example of investment in new and alternate energy sectors in Queensland.
He said the its footprint sat within the Western Downs and South Burnett regional councils and would drive jobs and industry to the area.
TSBE General Manager (Supply Chain) Reagan Parle said a number of regional firms had significant major project experience and their credentials would be well-placed geographically to compete for work with lead construction contractors.
“We anticipate that our membership and wider network can meet some aspects of the project and look forward to working towards interest around roads, trenching, fencing, earthworks, trades, transport and other operational requirements,” Mr Parle said.
“There are significant opportunities ahead for contractors in our region and we look forward to continuing to work with AGL.”
TSBE has already held information sessions in Kingaroy and Dalby in relation to the project and plans to hold further sessions to give local contractors a chance to understand the project requirements.
The next Community Consultative Committee meeting will be held on Thursday, August 31, from 1:00pm at the Cooranga North Hall.
The Coopers Gap wind farm is the first project in Queensland to be developed under the Powering Australian Renewables Fund (PARF), formed by AGL (20 per cent) and the Queensland Investment Corporation (80 per cent).
The fund provides an opportunity for investors to diversify risk and reduce costs.
AGL has provided $200 million in cornerstone equity and QIC, on behalf of its managed clients including the Federal Government’s Future Fund, have provided $800 million. The balance of funding will be debt raised at a project-by-project level.
PARF aims to develop 1000MW of large-scale renewable generation, with a total investment of $2 -3 billion. This would be 20 per cent of the estimated 5000MW of new renewable generation capacity required by 2020 to meet the Federal Government’s Renewable Energy Target.
AGL Managing Director and CEO Andy Vesey said on Thursday that more than 800MW of projects have now been sold into PARF since it began in July last year.
Earlier transactions involved the Silverton Wind Farm project and Nyngan and Broken Hill solar plants in NSW.
“The strong support we have received from our equity partners and lenders for these projects is testament to the readiness of the private sector to invest in Australia‘s energy transformation,” Mr Vesey said.
The $22 million sale of the Coopers Gap project into PARF includes AGL writing a power purchase agreement at a bundled (ie. including both electricity and associated renewable energy certificates) offtake price of less than $60/MWh (real) for an initial five years.
There is an option to extend this agreement for another five years at the same or lower price.
“PARF has played a key role in a rapid uptick in generation project development in Australia,” AGL Chief Financial Officer Brett Redman said.
“This demonstrates the effectiveness of the investment model, the falling price and increasing efficiency of renewables technology and the key role renewables have to play in providing clean and affordable energy for Australia.”
Ross Israel, head of Global Infrastructure at QIC, said the Coopers Gap project represented a significant investment for PARF “and for renewable energy in regional Queensland”.
“The project is the largest committed renewables project in Queensland. It is a testament to the strength of our long-term partnership with AGL and our ability to work constructively through times of significant policy uncertainty in the energy market.” he said.