Ararat Wind Farm leads the way for investment

Ararat Wind Farm
Early stages of construction at Ararat Wind Farm

In June, Renewable Energy Systems gave the 240MW Ararat wind farm the green light, making it the first major wind project in Australia to reach financial closure in nearly two years.

With a view to power the equivalent of around 120,000 households per annum, the Ararat wind farm is expected to unlock a$450 million investment within southwest Victoria.

The Australian wind energy industry moved quickly to take advantage of investor confidence following the Federal Government’s decision to lower the Renewable Energy Target (RET). The first major renewable energy project to be signed, Ararat wind farm, has now unlocked nearly half a billion dollars of international investment for what will be the third largest wind farm in the country. Ararat wind farm was one of the winners of the ACT’s first wind energy reverse auction delivered in February, along with Coonooer Bridge Wind Farm in Victoria and Hornsdale Wind Farm in South Australia. Its winning bid was $87 per megawatt-hour for 80.5MW capacity.

Financed by shareholders Partners Group, RES, OPTrust and GE, the project consists of 75GE 3.2MW wind turbines, two substations (33/132kV and 132/220kV) and a 132kV overhead transmission line. Downer will construct the wind farm and Transmission Operations Australia (TOA2) will construct the transmission line, which will connect to the existing AusNet Services transmission network. Each of the 75 turbines will have a blade tip height of up to 135m above ground level. There are five turbines proposed within Northern Grampians Shire Council area and 70 turbines proposed within Ararat Rural City Council area.

Keppel Prince in Portland will be supplying 35 towers for the clean power plant, establishing the business as a major producer of wind towers after it became one of the first casualties of uncertainty surrounding the RET last year.

With renewable energy certificates currently trading at near record levels of more than $52/MWh, and Victorian energy prices averaging more than $30/MWh so far this year, the wind farm should be able to match the prices guaranteed by the ACT, as reported by RenewEconomy. Civil works have now commenced and the project is due be completed in April 2017. Located on rural land – approximately 180km north-west of Melbourne and between 9-17km north-east of Ararat, the project will employ around 165 workers directly in the construction phase, lead to another 120 jobs indirectly in operations, and is expected to inject at least $7-8 million into the local economy throughout i ts development timeline. In fact, a 2012 study on the economic benefits of wind farms in Australia found for every 50MW wind farm with an average construction workforce of 48 people, each worker will spend approximately $25,000 per year in the local area, equating to a local economic benefit of $1.2 million per year.

What’s more, a local community fund will be established to inject around $2 million in philanthropic support into the region, as well as a robust community relations program in the form of information sessions, newsletters, advertisements, direct mail-outs and a dedicated hotline. RES Australia identified the high ground around Ararat as a suitable location for a wind farm back in 2007. The layout of the development has been designed to take into account feedback from all stakeholders, from carrying out extensive environmental studies on the site and by listening to issues raised by the local community and consultants.

With long-term drought-proof jobs set to benefit residents not only from Ararat, but also from the Northern Grampians Shire Council through to the Pyrenees Shire Council – which is hosting the substation – it’s not surprising the project is being supported by many within the region.

“Businesses invest in rural and regional towns when they see the capacity for growth and a quality product,” Liberal Party MP for Wannon Dan Tehan said.

“This project is an acknowledgement of the potential of our local manufacturers and businesses.”

GE Australia, New Zealand and PNG president and chief executive officer Geoff Culbert said agreement around the RET has been the driving force, creating certainty and enabling the equity partners needed to make firm decisions around long-term investment opportunities in Australia.

“With certainty comes investment – that’s our experience overseas and that’s what we’ll see here in Australia now the RET is resolved. I congratulate both the Coalition and the ALP on restoring the policy certainty needed to enable investment and job creation,” he said.

Asia-Pacific Partners Group managing director and head of private infrastructure Benjamin Haan said the project will have a considerable impact on the future of renewable energy in Australia.

“The Ararat wind farm is a wellstructured project with high-quality counterparties and a strong wind resource. The timing of our investment
aligns with increased certainty around Australia’s RET, which will require a substantial build-out of renewables in the coming years,” he said.

“The wind farm will make a great contribution not only to the local community in Ararat, in the form of employment, education and investment, but also to the future of renewable energy in Australia.”

RES Australia chief operating officer Matt Rebbeck agreed, saying the project represents a major development for south-west Victoria.

“After many years of work from a dedicated team, RES is proud to deliver the Ararat wind farm. It is a worldclass project and one of the largest in Australia,” he said.

“RES would like to thank the local community for its support throughout the project’s development. Also we would like to thank the ACT Government for its foresight in establishing innovative policies that are delivering low cost clean energy projects.”

Ararat wind farm benefited from a power purchase agreement with the ACT, guaranteeing the purchase of a portion of the energy produced at the site, which was awarded under the territory’s innovative Wind Auction scheme.

“The Ararat wind farm will also be partnering with ACT researchers and institutions on projects that will potentially have global applications and support the ACT as a positive place for renewable energy companies to invest plus a positive model for other states to follow in unlocking the potential of clean energy projects in Australia,” Mr Rebbeck said.

As well as focusing on the construction of the Ararat wind farm, RES is now looking to develop further opportunities in wind, solar and energy storage in Australia.