GREEN DEALS: Wind – big, bigger, biggest

As Meridian mulls an exit from Macarthur, REpower is making progress with the Ceres wind farm, which would overtake Macarthur as our largest. Elsewhere, there's mixed news at two smaller wind farms, solar takeovers overseas and R&D tax incentive approval for Algae.Tec.

Meridian Energy – Macarthur and Mt Mercer wind farms

Meridian Energy may sell out of the Macarthur wind farm as another of its Australian investments nears construction.

The NZ-government owned Meridian has a 50 per cent stake in the $1 billion project, which will be Australia’s largest wind farm when it becomes fully operational within the next couple of months. But with much of the heavy lifting out of the way the company is looking to cash in its chips, although discussions are still in their early stages.

The most obvious buyer would be AGL Energy, which currently shares ownership with Meridian.

"We can stay in the 25-year deal or we can look at selling. While interest rates are low, there's a profit to be made," Meridian Chief Executive Mark Binns told BusinessDesk.

“(The way Macarthur is structured) doesn't totally fit with our strategy."

What Binns means by this is that Macarthur is of no benefit to the company’s fledgling retail operations, as the power generated has been committed entirely to AGL.

Meanwhile, Meridian is starting work on another wind farm – Mt Mercer, which will be of use to its retail division.

Construction on the 131 MW project, 30 kilometres south of Ballarat in Victoria, will begin on Monday, with the first turbine to be delivered in August.

When Mt Mercer is complete, Meridian will have full ownership of 201 MW of capacity through Mt Mercer and the already completed Mt Millar – and, as far as we are aware, no offtake deals for either of them.

Ceres wind farm, REpower

While Macarthur is bigger than anything in Australia right now, it mightn't be for long with REpower snapping at its heels with the Ceres wind farm.

REpower has lodged an official development application – a whopping 1600 pages – for its $1.3 billion Ceres wind project. If built now, the wind farm would be Australia’s largest, at 597 MW.

“This represents a major milestone for the project,” Peter Sgardelis, Head of Development at REpower, said. “(It is) one of the most comprehensive development applications for a wind farm anywhere in Australia.”

The site on the Yorke Peninsula in South Australia would house 199 3-MW turbines.

With 600 metres spacing between each turbine, the company said it will be the least densely populated wind farm in Australia. Having the least densely populated wind farm is quite a feat given it will be Australia’s largest in terms of generation and it’s no surprise then that it will be spread out over a large land area, some 18,000 hectares.

REpower is hoping to receive development approval by the middle of the year, with commercial arrangements quickly following in the third quarter. This would pave the way for the farm to be built by the end of 2015.

If given the go-ahead, the project will create around 500 jobs during construction and 50 ongoing jobs for its first 25 years.

Algae.Tec

Renewable oil from algae group Algae.Tec has received approval from the federal government for a $12.15 million cash refund for development spending slated for June 30 2012 through to June 30 2015.

The approval will support the funding of at least three algae bioreactor facilities in Australia, Asia and the US. It sees the company receive 45 per cent reimbursement on spending of $27 million as soon as the expenditure is made, with the money provided via R&D tax incentives managed by AusIndustry.

Green Point Wind Farm

The 54 MW Green Point wind farm will not proceed, developer Wind Prospect has said. The project was first approved way back in 2001 but was slowed after the critically endangered orange bellied parrot was found in the vicinity of the site. The company had still been moving forward and was planning to erect three 1.5 MW turbines this year, before moving to build a further 22 in stage two.

“Due to current economic market conditions in Australia, it is not favourable to continue with the development and construction of the Green Point Wind Farm due to its small scale,” the company’s development manager Aaron Sluczanowski wrote in a letter to council, according to Fairfax publication The Border Watch.

Energy Australia

EnergyAustralia has restarted its fourth generator at Yallourn after finding the mothballs didn’t quite suit it in summer with the price of electricity so high. The company idled the generator, which supplies around 360-370 MW of the coal-fired site’s 1450 MW capacity, in October. While that was being restarted, the company was looking to mothball another generator in New South Wales.

This time it was one of the two 500 MW generators at the Wallerawang power station owned by Delta Electricity. EnergyAustralia, in its gentrader deal with Delta, has the authority to reduce supply for a certain period of time. In this case it will likely be mothballed from the middle of this month to the end of the year. It is on standby during that time in case it is needed to meet a surge in demand.

The news is awkward for the New South Wales government, which was looking to sell the plant as part of its latest round of power privatisation. That task was already challenging in light of weak electricity demand, falling wholesale prices and a dearth of suitable bidders, and this certainly doesn’t help.

Quick takes

-- As reported on Climate Spectator earlier this week, Warren Buffett has made another foray into clean energy. The latest, through utility MidAmerican Energy Holdings, is the purchase of the world’s largest solar plant from SunPower for $2-$2.5 billion.

-- China’s Hanergy has finalised a purchase of US thin-film solar panel maker Miasole. The purchase price remains unknown although it is likely in the range of $100 to $150 million.

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