$500m from Spanish energy giant Iberdrola kickstarts DP Energy’s Port Augusta renewable project
A huge renewable energy project at Port Augusta is up and running with a $500m funding injection from a Spanish firm. And, the finances stack up without the federal subsidy incentive scheme, the developer says.
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Construction will start within months on a huge renewable energy park south of Port Augusta, with a Spanish company investing $500 million in the project.
About 200 construction jobs will be created to build the wind and solar farm which will straddle the Augusta Hwy for about 10km south of Stirling North.
The project marks a turning point in wind energy in South Australia, with its business case having no reliance on the Federal Government incentive scheme.
“It’s a post-Renewable Energy Target world,” DP Energy director and country manager Catherine Way said.
“Gone are the days when you go for really high capacity plants that spin lots so you get revenue from the RET scheme — we’re not relying on that at all.”
The RET provided financial incentives by requiring retailers to submit certificates to the Clean Energy Regulator to prove a proportion of the energy they sold came from renewable sources.
The target, of 33,000GWh by 2020, was met in August last year but new projects will continue to be built because of the lower cost of renewables.
Of the $500 million capital cost of the Port Augusta Renewable Energy Project, about $150 million is expected to be spent in SA, including $45 million in the Upper Spencer Gulf, DP Energy said.
Ms Way said the site took advantage of local conditions to match the times at which South Australian consumers needed power.
“The wind here peaks around 6pm to 7pm which follows the solar during the day” Ms Way said.
The reliable daily wind at the location was driven by the temperature difference between the sea and desert.
Ms Way said recruitment and contracting would start now with construction to begin in June.
The 320MW project will consist of 100MW solar and 210MW wind from 50 turbines with a tip height of 185m.
Approvals include a battery which can be added later if economically viable.
The project is the first Australian investment for Spanish company Iberdrola.
“A 320MW hybrid wind and solar project is of great significance to our team and we look forward to working with local communities in SA throughout the lifetime of the project,” Iberdrola country manager Fernando Santamaria said.
Iberdrola, which made a net profit of €2.5 billion in the nine months to October last year, will finance the project itself.
Iberdrola will take ownership and ongoing operation from DP Energy once the project is built.
Energy and Mining Minister Dan van Holst Pellekaan welcomed Iberdrola’s investment as
an endorsement of Port Augusta’s renewable energy credentials.
“Iberdrola is a world leader in wind energy and will use DP Energy’s Port Augusta solar and wind farm project to make its debut in the Australian market,” he said.
DP Energy will retain rights and approvals on a second stage for future development.