The Australian Capital Territory has achieved new record low prices for wind energy in Australia as it signs contracts with another 200MW of capacity that will form the final piece in the territory’s 100 per cent renewable by 2020 plan.
ACT environment and climate change minister Simon Corbell announced the results of the latest reverse auction tender on Tuesday, with 109MW of capacity going to stage 3 of the Hornsdale wind project in South Australia, and 91MW going to the Crookwell 2 wind farm in southern NSW.
The Hornsdale wind farm contract was struck at a fixed price of $73/MWh for 20 years, a record low in Australia, and beating the $77/MWh contract achieved for the second stage of that project in the previous auction. Factoring in the 20-year fixed price, the bid equates to a price of around $57/MWh.
The Crookwell 2 wind farm, owned by Spain’s Union Fenosa and located north west of Goulburn, was struck at a fixed price of $86.60/MWh, a record low for the state of NSW.
The two wind farms will also contribute $25 million in finance towards the rollout of 36MW of battery storage installations in 5,000 ACT homes and businesses.
Corbell said the significance of the auction lay not just in the falling cost of wind energy, but also of solar projects included in the 15 projects that bid in the tender.
“Large scale solar prices have come significantly,” Corbell told RenewEconomy. “They are very close to wind prices and that is a very encouraging movement. There is no doubt that it is just a matter of time before large scale solar will match wind prices.”
Corbell, who steps away from politics later this year, said it was satisfying that the auction process had been completed and the “final piece” in its target to source 100 per cent of its electricity needs from renewables by 2020 had been put in place.
“These two wind farms will lift our renewable energy percentage to 100% by 2020 and secure the achievement of our emission reduction goals in that year,” he said in a statement.
Hornsdale – owned by France’s Neoen International and Australia’s Megawatt Capital – has been the most aggressive bidder in the auction process and has now secured contracts for 309MW of capacity.
Neoen’s Franck Wotiez says Hornsdale was able to offer a low price because of the synergies offered by the previous two stages. But he said prices were going down as turbines grew in size and other efficiencies were obtained.
The project, located around 150kms north of Adelaide, is considered to have one of the best wind resources in the country. The first stage of the project began production from its first turbines last month. The company plans to achieve 1000MW of wind and solar assets in Australia by 2020.
Corbell said the economic benefits flowing from the reverse auction projects now total more than $500 million, including research, innovation, jobs and education in the renewable energy sector here in Canberra.
“The ACT is attracting international business investment and creating exciting new collaboration opportunities for local start-ups and entrepreneurs,” he said.
“This will ensure Canberra remains at the centre of this industry as it grows nationally and internationally. With four international wind companies establishing their headquarters here, the future jobs growth potential is enormous.”
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.