Synergy intends to develop up to 280 megawatts of renewable energy projects in WA by 2020 after the McGowan government approved plans for a private investor to acquire a majority stake in its existing wind farm and solar farm and in two new projects.
Synergy intends to develop up to 280 megawatts of renewable energy projects in Western Australia by 2020 after the McGowan government approved plans for a private investor to acquire a majority stake in its existing wind farm and solar farm, and in two new projects.
Synergy has not named its private equity partner, but media reports have it as Dutch Infrastructure Fund, a giant entity with a global portfolio of 175 infrastructure assets.
The private investor will buy an unspecified equity stake in Synergy’s Grasmere wind farm at Albany and its Greenough River solar farm near Geraldton.
More significantly, it will also be a part owner of the planned Warradarge wind farm near Eneabba, which will be up to 250MW, making it the largest renewable energy asset in the state.
To put that in context, APA Group is currently spending $315 million on its Badingarra wind farm, which will have a capacity of 130MW - second only to the Collgar wind farm in the wheatbelt.
Alinta Energy has for some years been evaluating an even larger project – its Yandin wind farm would be up to 300MW if it proceeds.
As well as Warradarge, Synergy and its private partner plan to expand the Greenough River solar farm from 10MW to 40MW.
Synergy paid $17.6 million in June this year to buy GE Energy's half share in Greenough River.
The planned investments will enable Synergy to generate extra large-scale renewable generation certificates (LGCs), which it needs to comply with Commonwealth renewable energy targets.
These projects may still proceed under their own steam, but the market will be more challenging.
A Synergy spokesperson said today final discussions were ongoing and the name of its equity partner would be announced in due course.
“Recent cabinet approval has provided Synergy with the necessary framework to close out the transaction,” the spokesperson said.
The amount of equity taken by the private investor is understood to be dependent on the final size of the Warradarge wind farm, which will dictate the scale of the investment.
The spokesperson added Warradarge has been a development option for Synergy for a number of years and was the best renewable energy option available in the state.
Energy Minister Ben Wyatt said the deal provided a sustainable plan for the state’s transition to a cleaner energy future and did so in a way that was fiscally responsible.
“Cabinet has approved Synergy to enter into a joint venture with private equity to build new large-scale renewable projects in the SWIS, and we have struck the right balance,” he said.
“The strategy has also got the balance right in the size of the projects being developed and ensured that there is opportunity for Synergy’s current workforce to transition into the development of renewable energy projects.”
Mr Wyatt sought to head off criticism of the private sector investment in light of Labor’s strong stance ahead of this year’s state election against the privatisation of Western Power.
“The state government’s overall ownership of renewable energy assets in the SWIS will increase through its ongoing stake in a much larger Greenough River solar farm development and Warradarge wind farm,” he stated.
The final capacity size of the Warradarge wind farm will be determined on completion of the engineering, procurement and construction contract tendering process that is currently under way.
The two projects will create about 200 construction jobs.