China’s Longyuan and Thailand’s Egco Among Australian Wind Farm Bidders
China Longyuan Power Group Corp and Thailand’s Electricity Generating PCL are among shortlisted parties vying to buy a stake in an Australian wind farm. Interest in the Boco Rock wind farm in New South Wales state planned by Continental Wind Partners and Wind Prospect Group underscores how overseas investors are becoming more confident that they can make a profit from renewable energy projects. Early investments had to compete for customers with generators of electricity produced from burning cheaply available thermal coal, but the government has moved to close the gap, including by introducing measures such as a carbon tax.
At the end of the 2009-2010 financial year, the last complete data available from the Australian government, renewable energy accounted for around 8% of total electricity generation in the country. Of this, wind energy contributed 2% to total power output.
However, this is set to increase sharply as Australia’s government has set a target of having 20% of electricity supply coming from renewable energy sources like wind power by 2020. To achieve this goal, it has introduced policies that mandate electricity retailers to buy a proportion of their sales from renewable energy sources.
The Wall Street Journal reported in October that Continental Wind Partners was seeking to sell a stake in Boco Rock, which will have up to 107 megawatts of installed generating capacity. Bidders may acquire between 50% and 100% of Boco Rock, depending on whether General Electric Co.’s GE -1.07% energy investment arm GE Energy Financial Services exercises its right to 50% of the wind farm’s equity, the people said. The entire project would have an enterprise value of around 300 million Australian dollars (US$311 million), and shortlisted parties are speaking to banks about possible financing packages.
Final bids are due by the end of April, and a deal could close the following month.
The first stage of development includes 66 turbines, and government approval has been received to double the wind farm’s size to up to 122 turbines. In September, EnergyAustralia signed a power purchase agreement, or PPA, which includes acquiring the output and renewable energy certificates generated from Boco Rock’s foundation stage. EnergyAustralia is the Australian unit of Hong Kong-listed power generator CLP Holdings Ltd. 0002.HK -0.60%
Bangkok-listed Egco has previously sought to buy Australian assets including the 53-MW Hallet 5 Wind Farm, which was eventually sold by AGL Energy Ltd. AGK.AU -1.81% to Japan’s largest wind power developer Eurus Energy Holdings Corp., a company owned by Toyota Tsusho Corp. 8015.TO -3.59% and Tokyo Electric Power Co. 9501.TO -2.33% Egco also sought to buy a stake in two of Australia’s biggest wind farms from closely held renewable energy producer Hydro Tasmania, a process that was eventually won by China’s Guohua Energy Investment Co., a unit of state-owned enterprise Shenhua Group.