The CEFC will invest $94 million in Australia’s first fully integrated wind, solar and battery project, at the central north Queensland Kennedy Energy Park. The project is being developed by Windlab and Eurus Energy.
The $170 million 60MW hybrid renewable energy project will connect to the local grid, providing electricity to communities from Julia Creek to Charters Towers, more than 500km away. It will generate enough power for more than 30,000 average homes each year.
“This is a landmark project for Queensland and Australia, creating a new model for renewable energy that brings together the benefits of wind, solar and battery storage to overcome intermittency and improve reliability,” CEFC wind sector lead Andrew Gardner said.
“Financing three separate technologies on one site was a complex undertaking that had not previously been achieved in Australia. As the sole debt financier for this project, our goal was to demonstrate the bankability of large-scale, integrated hybrid renewable energy projects for the future. We expect such projects to become an increasingly important part of Australia’s electricity system, with complementary battery storage addressing the intermittency of wind and solar generation to support grid stability.”
The Kennedy Energy Park is part of a wave of new large-scale renewable energy and storage projects in North Queensland, which include the Kidston solar and pumped hydro project, the Ross River Solar Farm, the proposed Forsayth wind farm and the proposed Burdekin hydro project.
The CEFC has already committed almost $260 million to the Kidston and Ross River projects, as well as five other large-scale solar farms in north Queensland. Since inception, the CEFC has committed some $350 million to Queensland clean energy projects with a combined value of $1.4 billion representing an additional $3 of other financing for each $1 of CEFC investment.
Canberra-based Windlab is an innovative Australian company commercialising world-leading atmospheric modelling and wind energy assessment technology developed by the CSIRO. The CEFC had previously provided Windlab with $8 million in corporate finance to assist the company with its continued expansion from a pure play project developer to an integrated developer, owner and manager of renewable energy assets.
“We are delighted to continue our work for Windlab, which is at the forefront of innovation in the clean energy sector,” CEFC project lead Bobby Vidakovic said.
“Windlab identified the Kennedy site after confirming its high levels of solar irradiance and world class complementary wind resource. The natural benefits of the site will deliver high levels of solar energy throughout the day and strong wind generation in the evenings, creating a reliable generation profile around the clock. The addition of the battery component will provide increased grid stability, allowing local communities to benefit from cheaper, cleaner electricity closer to the point of generation, with the added benefit of relieving demand on long transmission lines.”
Windlab chairman and CEO Roger Price said: “This has been an enormously challenging yet important project for Queensland and Australia. It will demonstrate the importance of matching wind and solar generation to provide more predictable, reliable and low cost renewable energy.
“Successfully completing this project will also help unlock the enormous potential of Big Kennedy, the 1,200MW wind resource 80km north of Kennedy Energy Park that will be critical in balancing the large amounts of solar generation that is being added to the Queensland network.”
Leading renewable energy developer Eurus Energy has a 50% equity stake in the Kennedy Energy Park, which includes 43.2MW of wind, 15MW (AC) of solar and 2MW of battery storage. The project is expected to deliver lifetime emissions abatement of almost three million tCO2-e. Windlab has secured a 10-year agreement with Queensland government owned CS Energy to purchase the renewable energy and some of the large-scale generation certificates (LGCs) produced by the project.
In October 2016, the Australian Renewable Energy Agency (ARENA) announced it had committed up to $18 million in recoupable grant funding for the project.
Gardner added: “As the cost of producing electricity from renewable resources continues its rapid downward trajectory, we can expect investors to be increasingly attracted to large-scale hybrid renewable energy projects as the next wave of investment and technological innovation.
“By demonstrating how wind and solar can be co-developed, and combined with battery storage, we can continue to increase our renewable energy capacity while providing important ancillary benefits required to delivery grid stability and security.”