US data centre giant locks in renewable energy supplies

One of Australia’s largest wind farms will provide electricity for US data centre giant Equinix, as an ever-growing number of companies move to lock in green energy supplies.

Equinix, a US-listed data centre giant, has agreed to purchase 20 per cent of the electricity generated by one of Australia’s largest wind projects.

The deal will allow Equinix to meet its local offset requirements, and marks a broadening of the types of Australian corporates seeking to make such arrangements with renewable energy ­developers.

The so-called purchase power agreement is the second such deal struck by TagEnergy for its Golden Plains wind farm at Rokewood, west of Geelong in Victoria.

TagEnergy last year did a deal with Snowy Hydro for the sale of 40 per cent of the electricity ­produced by the wind farm in ­Victoria.

TagEnergy’s managing partner, Australia, Andrew Riggs, said the deal with Equinix underscored the quality of the Golden Plains Wind Farm project.

“We can see our customers evolving from traditionals such as Snowy to corporates who are differentiating,” Mr Riggs told The Australian.

The Golden Plains deal is Equinix’s first long-term power purchase agreement in the Asia-Pacific region. It becomes operational on January 1, 2029.

The deal would help Equinix reach renewables coverage targets at its 17 International Business Exchange data centres across Australia, said Guy Danskine, Equinix managing director, Australia. Equinix in 2019 committed to contracting sufficient renewable energy to cover its 250 global sites, and Mr Danskine said the pledge was at the forefront of customers’ minds.

“It was something that was nice to have a few years ago but now it is top of the list, or top few. Clearly the energy we consume on behalf of our customers contributes to their scope 2 emissions and scope 3 emissions and many of them have their own climate-neutral objectives,” Mr Danskine told The Australian.

Construction of the Golden Plains Wind Farm began last year and Mr Riggs said first power was expected in the first quarter of 2025. An expansion of the project was expected shortly afterwards, he said, with a final investment decision on stage 2 next year.

Once all work is completed, Golden Plains Wind Farm will effectively prevent more than 4.5 million ­tonnes of carbon dioxide being emitted into the atmosphere annually – equivalent to 3 per cent of Victoria’s total greenhouse emissions.

Critically the development will also aid Victoria’s energy transition. Victoria is one of Australia’s most coal-dependent states, and its second-largest electricity generator will retire in about four years, while the state is behind in developing new alternative zero-emission sources of power.

The federal Labor government has estimated Golden Plains will generate enough electricity to meet 9 per cent of Victoria’s power demand, the Clean Energy Finance Corporation said.

The CEFC has invested $175m into the project, the single largest wind farm investment by the $6.5bn government-owned organisation, and is also expected to yield the biggest single contribution to emissions reduction in its portfolio.

The CEFC funding for Golden Plains will sit alongside $1.8bn of private sector capital, including equity from TagEnergy as well as debt from Westpac, Commonwealth Bank, Bank of China, Mizuho, Germany’s state-owned KfW and Danish credit export agency EKF.

TagEnergy took the decision to develop the $2bn wind farm on a fully merchant basis. A merchant generator trades in the wholesale market rather than taking on long-term power purchase contracts with customers.

Once operational the wind farm should provide power for about 450,000 homes a year.

Onshore wind projects have struggled to win favour with local communities and authorities.