CWP Renewables promises cheaper power as it outlines a greener future
CWP Renewables says making clean energy the backbone of Australia’s power grid will lower electricity prices.
The $4bn CWP Renewables says making clean energy the backbone of Australia’s power grid will lower electricity prices, but warned that transmission and back-up firming solutions must become a bigger priority to avoid a bumpy transition.
CWP, put up for sale by its Swiss private equity fund manager Partners Group, has more than a gigawatt of wind and solar farms running or close to start-up and a 5GW pipeline of projects in the works.
With households facing a big surge in their power bills and uncertainty over a rocky transition away from coal, CWP says adding renewables will lead to lower prices over the mid to long-term.
“One thing I’m very confident in is that building out more renewables will be cheaper than where the market is at the moment,” CWP chief executive Jason Willoughby told The Australian. “And I think it’s going to be fundamental to ensuring low-cost power in this country.”
Wholesale electricity prices at least doubled in most states in the first quarter of 2022 and quadrupled in Queensland amid high demand and fuel prices, while the Ukraine conflict saw gas markets also hit a record.
“The prices we’ve seen in the wholesale market are obviously being impacted by higher gas and coal costs and coal unavailability,” Mr Willoughby said.
“They’re all issues arising from the status quo.
“The build-out of renewables will bring increased supply, which will be really important for bringing those costs down.”
A raft of high-profile names including Canada’s CDPQ, Shell and APA have been linked with the potential sale of CWP, in a process being run through Macquarie Capital. While Mr Willoughby declined to comment, The Australian understands non-binding, indicative bids are due in June, with binding offers expected by October.
With the new federal government setting a goal of boosting the share of renewables in the national electricity market to 82 per cent by 2030, nearly triple current levels, big developers like CWP will need to sign off on huge investments to make the ambition a reality. Projects would need to be executed faster and transmission roadblocks overcome to hit the target, Mr Willoughby said, while ensuring communities were onside and sharing the benefits. State governments pushing ahead with renewable energy zones could also fast-track the clean energy market, he said.
“One of the things we are looking at is how can we take time out of the development cycle. For instance, can we run some of our activities around permitting and procurement concurrently and take some pretty material time out of those cycles.”
CWP also backs Labor’s $20bn Rewiring the Nation fund, a scheme to rebuild the grid to handle growing sources of solar and wind, as a critical strategy for meeting the 2030 target.
“It’s going to be really helpful in terms of speeding up the energy transition. I think a couple of those key elements around the money that’s going to be spent on building out and augmenting the transmission network are going to help in terms of expediting renewables,” Mr Willoughby said.
“We also need to make sure that there’s plenty of economic benefits through the regions that are going to be hosting infrastructure. And I do think that’s really important from a social licence perspective.”
Increasingly, CWP is focused on balancing its wind and solar portfolio with storage. Its proposed Spicers Creek wind farm within NSW’s Central-West Orana renewable energy zone is a giant 730MW but will also have battery storage to offer a firmed energy product to customers. Similarly, the 400MW Uungula wind project will have a big 150MW battery alongside, allowing surplus energy to be stored and then released to customers and the market when it is needed.
“We feel it’s incumbent on us to develop firming capability as well as underlying wind and solar,” Mr Willoughby said. “That’s why when we look at our portfolio development opportunities and storage capabilities, it’s going to be really critical.”
The Australian Energy Market Operator, which runs the national electricity network, has plotted a draft “step-change” scenario after consultation with industry to guide power grid investment over the next 30 years and ensure Australia hits goals to cut pollution.
The plan requires a ninefold increase in wind and solar capacity by 2050 to meet the nation’s net zero emissions targets while some 45 gigawatts of storage across batteries and hydro will be required, with 9GW of gas-fired power needed to help firm up renewables.
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