Origin Energy has set a new benchmark for renewable energy power purchase agreement (PPA) pricing after committing to the 530MW Stockyard Hill wind farm.
The Stockyard Hill wind farm will be located about 35km west of Ballarat and is slated to be Australia’s largest wind farm.
Under the terms of the agreements, Origin will sell the wind farm to Chinese company Goldwind for $110 million.
Origin also signed a long-term PPA from the commencements of operations in 2019 to 2030.
Origin will agree to buy all of the power generated by the wind farm and the associated Renewable Energy Certificates (RECs) for a market-leading PPA price of below $60/MWh.
The sale of Stockyard Hill wind farm is subject to the satisfaction of certain regulatory approvals.
The PPA will also be subject to the satisfaction of a number of conditions including Goldwind achieving financial close.
“Today’s announcement is important as it indicates just how fast the transition is occurring in Australia’s energy market,” Origin chief executive Frank Calabria said.
“Not only is renewable energy being rolled out rapidly, the costs have fallen at a very fast rate.
“Through our deal with Goldwind, Origin has been able to add a substantial amount of new renewable energy to our portfolio at a market leading PPA price, and as Stockyard Hill is in Victoria, this will help to cover a large portion of the load of the recently retired Hazelwood Power Station.”
Last year, Origin announced its ambition to add up to 1500MW of new renewables by 2020. The company is just 300MW short of its target.
“By 2020, we expect that renewables will be more than 25 per cent of the energy in our generation mix, allowing us to deliver the cleaner energy our customers want,” Mr Calabria said.
“Today’s agreements are also good news for Victoria, signaling Goldwind’s forthcoming development of what will be Australia’s largest wind farm at Stockyard Hill, and we look forward to working with both the Victorian and Commonwealth governments to secure the necessary approvals to make this happen.
“Stockyard Hill’s development will boost the clean energy credentials of Victoria, which up until now has been known for having the most carbon-intensive energy supply of any Australian state or territory.”
The project is expected to generate 300 jobs during construction.