A $3 billion renewable energy hub in South Australia will begin construction within the next two years after French-based developer Neoen landed a contract for the first 100MW of wind capacity with the ACT government, with a record low price for Australia.
The $3 billion Goyder project is one of the most ambitious in Australia, poposing to combine 1200MW of wind, 600MW of solar and 900MW/1800MWh of battery storage. Each component is the biggest of their kind in Australia, and together the hub is the biggest of its kind in the world.
Neoen announced on Tuesday morning that it has been awarded a 14-year contract to supply 100MW of wind energy from Stage 1 of its Goyder Renewables Zone as the result of the Australian Capital Territory government’s latest renewables auction, a win that will also see it build a 50MW big battery in Canberra, with locals offered the opportunity to co-invest.
The ACT said the contract was awarded at the price of $44.97/MWh, which is a record low for a publicly disclosed price for a wind auction or power purchase agreement in Australia.
Given that this is a fixed and flat price for 14 years, the “real price” for when the contract starts in 2023 relates to $35/MWh to $37/MWh, depending on your assumed inflation rate. That equates to less than half the average wholesale price in NSW and the ACT last financial year.
Goyder is expected to be able to deliver this because it has a great wind resource and will have a healthy “net” capacity factor of around 45 per cent, and the certainty of a long term contract will allow it to secure finance for the first stage, and then be able to build upon that over time.
The Neoen battery in Canberra will, in effect, be a replica of Neoen’s Hornsdale big battery in South Australia and will deliver much the same services – frequency control, inertia, arbitrage and other grid services. There is no direct subsidy for the battery.
The ACT has already contracted enough wind and solar to meet the equivalent of all its annual electricity needs, but last year sought a minimum 200MW of wind, or 250MW of solar, plus battery storage, to take into account economic and population growth, and the electrification of transport and building energy use.
The second contract awarded on Tuesday by the ACT government is for a 100MW expansion of the Berrybank wind farm in Victoria, and developer GPG will also build a 10MW/20MWh battery. The 10 year contract is for $54.48 per MWh.