Brookfield seals wind deal to kick off $20bn green goal
Canada’s Brookfield has kicked off a green deal as part of a potential $20bn investment spree should it land a takeover deal for Origin Energy.
Brookfield, the company behind a $18.7bn takeover offer for Origin Energy, has sealed its first renewable power project in Australia as part of a plan to install 14 gigawatts of new generation over the next decade.
The company’s Brookfield Renewable arm has partnered with Australian developer Greenleaf Renewables to develop, build, own and operate the proposed Moonlight Range Wind Farm in central Queensland.
The 400 megawatt Moonlight Range Wind Farm is currently in the development phase and primed to start construction in 2025.
It marks the first generation pledge made as part of the Canadian giant’s takeover bid for Origin Energy, now a binding deal but still reliant on a string of regulatory approvals.
The deal, the fourth offer by the consortium since talks started in August, includes a plan for Brookfield to invest an extra $20bn in Origin through to 2030 to build up to 14 GW of new renewable generation and storage facilities in Australia.
The proposed investment in new-build renewables represents one-fifth of the total utility-scale renewable capacity required to be developed across the national electricity market through to 2030.
“The intention here is that if we are successful with Origin, we will intend to put this into Origin subject to completion and getting past all other hurdles that we have from a regulatory perspective here,” Luke Edwards, Brookfield’s head of renewable power and transition in Australia said in an interview.
“But what we’re really doing here is telling the market that we’re getting on with it.”
Obstacles with the competition regulator may prove a problem for the bidding consortium for Origin given Brookfield owns Victoria’s electricity transmission operator AusNet. “The other point is if we aren’t successful with Origin we will still do it because we still have to plan to build out that renewables platform over the next 10 years anyway,” he added.
Brookfield and Greenleaf have also formed a strategic partnership to develop future renewable projects along Australia’s east coast, with a focus on wind and energy storage projects.
This includes Greenleaf’s project pipeline of more than 600MW, the companies said.
Brookfield has more than 25GW of installed capacity and a global pipeline of approximately 110 GW.
“The Moonlight Range Wind Farm will be the first of many renewable power projects for Brookfield in Australia as we expand our presence in this market,” Mr Edwards said. “Approximately 8GW of coal fired power generation capacity is expected to come offline by 2030 – this generation needs to be replaced with new sources of clean energy.”
Brookfield Asia Pacific boss Stewart Upson has previously said the Origin deal gives the company a unique opportunity to invest at least $20bn and “make a material difference” to achieving Australia’s net zero targets.
The consortium trimmed its offer to buy Origin in February after months of due diligence and uncertainty about the impact of Labor’s intervention on gas prices.
A bid was lowered to $8.90 a share after the duo previously offered $9.00 a share in November, with a scheme of arrangement offer remaining indicative and non-binding.
The green plan would see Brookfield tap Origin’s gas power plants which could be used as crucial back-up power for boosting its solar and wind generation this decade.
The Australian government complicated the landscape for energy investors with its December legislation capping gas prices in the domestic market for a year, and giving itself power to intervene in gas markets on a permanent basis.
The intervention was slammed by Australian LNG producers, and drew concern that it could derail the Brookfield-led takeover.
Brookfield embarked on the Origin deal after walked away from acquiring AGL Energy, rejected twice with takeover bids. Origin shares closed flat at $8.26.