Our finance has delivered a substantial increase in new wind generating capacity.
CEFC has contributed to a substantial increase in new wind generating capacity in Australia since 2013, contributing to the establishment of a robust ecosystem of local and international project developers, engineers, contractors, advisors and financial institutions.
Three wind investments in 2017-18 took total CEFC finance for wind since 2013 to more than $700 million, catalysing an additional $3.1 billion in private sector capital investment, and accelerating the development of more than 1,650MW of additional renewable energy capacity. Just after year end, the CEFC committed a further $59 million to the 112MW Granville Harbour Wind Farm, to deliver a one third increase in Tasmania’s wind capacity.
During the year, the levelised cost of wind generation continued to decrease, the result of lower up-front installation costs and longer turbine design lives. We also saw increased turbine size, reflecting advancements in rotor design, blade lengths and hub heights.
The CEFC continues to play an important counter-cyclical role in investment in the sector, helping maintain industry momentum and capacity through periods of weaker or changing market sentiment. While this peaked in 2014-15, with the CEFC delivering 90 per cent of new investment in wind generating assets, new investment in 2017-18 demonstrated the continuing need for CEFC finance for project delivery.
Despite the increasing maturity of the wind sector in Australia, the financing appetite for materially uncontracted projects remains a challenge, requiring a continuing role for the CEFC in contributing to developer and investor confidence in financing these projects to support continued investment.
CEFC finance is also supporting increasing interest in frequency control and battery storage technologies to improve grid stability.
BENEFITING LOCAL COMMUNITIES
The $250 million Crudine Ridge Wind Farm is being developed by CWP Renewables and Partners Group, with the CEFC participating in a $113 million senior debt facility. The central west New South Wales wind farm has a partial energy offtake agreement with Meridian Energy Australia, owner of retailer Powershop. The project will contribute more than $168,000 per year to Community Enhancement Funds. In addition, 19 host landowners will benefit from rental income throughout the life of the project, with neighbour agreements helping distribute funds to others in the local community.
WIND-POWERED BATTERY STORAGE
Stage One of the 212MW Lincoln Gap wind farm, in South Australia’s Port Augusta region, includes a 10MW battery energy storage system, capable of producing up to 10MWh of fast response storage capacity. The project, being developed by Nexif Energy Australia, draws on $150 million in CEFC debt finance. It complements other large-scale battery projects in South Australia, including the Tesla/NEOEN 100MW battery and ElectraNet 30MW battery on the York Peninsula. The project has a long-term offtake agreement with Snowy Hydro. It is the first Australia project to have secured debt finance for a grid-connected large-scale battery component on a non-subsidised basis.
LARGEST TASMANIA INVESTMENT
The 112MW Granville Harbour Wind Farm, on Tasmania’s west coast, will deliver a one third increase in Tasmania’s wind generating capacity. The $280 million development has a long-term power purchase agreement with Hydro Tasmania, which is exploring opportunities to become a net exporter of clean energy to the Australian mainland through its ‘battery of the nation’ project. The CEFC investment commitment of $59 million was announced just after year end.