Macquarie Bank’s investment arm has signed on as an equal partner in the development of Australia’s biggest wind farm project.
Sydney-based renewable energy company Epuron has announced Macquarie Capital, a division of Australia’s biggest investment bank, has agreed to join as an equal partner in the development of the project near Broken Hill in far western NSW.
The project will comprise 400 to 500 wind turbines and at full capacity will produce 1000MW or enough power for 400,000 homes, the largest in Australia. Epuron is a subsidiary of Conergy, one of the largest renewable energy companies in the world.
Epuron executive director Andrew Durran said Macquarie’s financial backing was an important endorsement.
“What the Macquarie involvement confirms is the fundamental viability of the project,” he said.
The project has had its critics, with some questioning the cost of building transmission lines to the main power grid, which Epuron acknowledged would be substantial, and NSW Energy Minister Ian Macdonald recently questioning whether the area was windy enough. Macquarie has $1.3 billion invested in renewable energy projects worldwide, much of that in wind generation in countries such as France, the US, Canada and Taiwan.
Mr Durran said Macquarie was a 50-50 partner in the development stage of the project, with its ultimate stake still to be negotiated. Macquarie confirmed its involvement but a spokesman said it was not in a position to comment on the specifics of the deal. The project is expected to cost $2.2 billion to $2.5 billion and take three to five years to build.
Epuron hopes to have planning approval by the end of the year, with construction to begin in 2009.
The wind farm, which will cover 450sqkm, could eventually supply 4.5 per cent of the state’s energy needs, Epuron said. Mr Durran said the backers had spent five to six years looking for the best places in Australia to build wind farms and were confident it was in the right location. “We are very confident about the wind speeds in the area,” he said.
The turbines will be located on permanent-leasehold country owned by graziers.
Mr Durran acknowledged the project had a “significant power line requirement” to connect it to the grid but that had already been factored in to the costings.
Essential to the viability of the project are government renewable energy targets. NSW has set a mandatory target for energy authorities to take at least 15 per cent of their power from renewable sources by 2020.
Mr Epuron said there was “a little bit of indecision for us” over the delay in the state Government putting its target into legislation but based on the federal Government’s more ambitious 20 per cent target by 2020 and the general push towards renewable energy, it had decided to go ahead. Epuron has a total of 2000MW of wind farms on the drawing board with construction of its first project near Goulburn in NSW due to start soon.
By Geoffrey Newman
8 January 2008
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