Westpac switches on to solar energy push

Westpac is jumping on board the ‘booming’ renewable energy wave.

Simon Currie of Renew Estate, Westpac’s Gary Thursby and Spark Infrastructure chief Rick Francis in Sydney yesterday. Picture: John Feder

Westpac is jumping on board the “booming” renewable energy wave with a commitment to become a key offtaker in a new solar energy farm, as part of a move to source 100 per cent of the bank’s energy needs through renewables by 2025.

Among other objectives, Westpac chief operating officer Gary Thursby said the commitment would give Westpac “financial certainty” on energy prices, in a period when Australian companies were being frustrated with high prices in the market from traditional power retailers.

“[This initiative] aligns with our objectives of being a leader in the renewable space; with our objective of supporting regional communities as well as creating some financial certainty for us,” Mr Thursby told The Australian.

“Australia’s renewable energy industry is booming and growing innovation in this space is making corporate participation much easier.”

The first phase of the transition to renewables will be through a 10-year power purchase agreement with Spark Infrastructure’s Bomen Solar Farm, to be constructed in Wagga Wagga.

That is estimated to provide about 45 per cent of Westpac’s annual energy usage of about 150 ­gigawatt hours.

Westpac’s purchase will account for just over a quarter of Bomen’s annual generation when it becomes operational next year.

In a statement, Spark Infrastructure estimated that the facility would generate more than 200GWh hours of electricity annually. Westpac said that was a conservative figure, but declined to provide a more precise number.

“We’re very excited that Westpac is one of the key offtakers under its 10-year power purchase agreement,” Spark Infrastructure chief executive Rick Francis said.

Westpac’s commitment to source nearly half its power from the Bomen Solar Farm followed a 12-month tender process. A range of options for phase two of the transition was being considered for the remainder of its power, the bank said yesterday.

Spark Infrastructure announced yesterday that it had acquired a 100 per cent interest in the Bomen Solar Farm from Renew Estate.

Construction is scheduled to begin this year, with a total cost at completion expected to be about $188 million.

“Bomen has highly contracted cash flows and attractive risk-­adjusted returns which will exceed current regulatory returns,” Spark Infrastructure chief executive Rick Francis said.

“While modest, it is a logical and prudent first step in diversifying our exposure to regulated ­assets and accesses growth in ­adjacent essential service infrastructure in line with our investment strategy.”

Renewable electricity retailer Flow Power has also committed to a range of contract tenures of five, seven and 10 years.

Telstra last month announced plans to double its investment in renewable energy, with tenders for 300MW in the NSW market.

“In the case of Westpac, the opportunities going forward would be ‘how do they work with their customers and the other people in their supply chain to ­deliver these benefits to a broader network of Australians’,” Renew Estate director Simon Currie said.

About $3bn in investments in new renewable energy projects in Australia has been driven by ­corporate power purchase ­agreements since 2016, Westpac said yesterday.