Australia’s biggest coal generator, AGL Energy, has signed a 15-year power purchase agreement to take nearly half of the output of the biggest wind project to be built in NSW to date.
The contract is with the 400MW Rye Park wind project, located north of Yass, and will represent 45 per cent of its output, or around 538GWh a year. The rest of the Rye Park output is contracted for 15 years to Newcrest Mining to help power its Cadia gold mine.
AGL did not reveal the cost of the contract – they are usually hidden from public view – but CEO Damien Nicks told the company’s Investor Day meeting that wind and solar PPA prices had jumped to “more than $70/MWh.
He said this was a result of supply chain issues and increased labour costs, and the lack of capital that was being sucked away to the US due to the impact of the Inflation Reduction Act.
PPA prices from wind and solar had fallen to as low as $40/MWh in recent years, including Neoen’s contract with the ACT for its Goyder South wind project in South Australia, with many contracts in the $50/MWh region.
“We’ve seen PPA prices step up across the whole market, whether that be just renewables or firming,” Nicks said in response to a question.
“You’re seeing some of the new PPAs are in the market in the $70s (per megawatt hour) for sure.
Rye Park will feature the most powerful wind turbines to be installed in Australia, with 66 V162 6.0MW turbines. The project is owned by Tilt Renewables, which is itself now partly owned by AGL through a fund that is managed by the Queensland Investment Corporation.
AGL has pledge to build or contract some 5GW of new wind and solar capacity and storage capacity by 2030, and 12GW by 2036 as it prepares the final steps in its transition from Australia’s biggest coal generator – and polluter – to renewables.
it recently closed the Liddell coal plant in NSW, and is expected to close both the Bayswater coal plant in NSW and the Loy Yang A brown coal generator in Victoria in the early to mid 2030s, if not earlier.
The CEO of Tilt Renewables, Geoff Dutaillis said the AGL deal meant that the Rye Park wind farm will be w fully contracted for an initial term of 15 years.
“The Rye Park Wind Farm is another example of us continuing to progress quality projects through our development pipeline and is the largest wind farm currently under construction in NSW,” he said.
“Our pipeline is one of the most extensive in the market and is well over 5 GW of quality wind, solar and storage opportunities across Australia. Tilt Renewables is well placed to remain a leading renewable energy business.”
AGL said in its Investor Day presentation that it is aiming for more than 6GW of new wind and solar capacity – some built but mostly contracted – by 2035, and will likely tap into Tilt’s 3.5GW pipeline for much of this.
It will spend up to $10 billion building assets – most of this in the planned 5GW “firming” capacity, most of this in battery storage, but also in pumped hydro. This includes an ARENA-backed 500W, four hour battery at the recently shuttered Liddell coal generator.
See also: AGL adds three more big batteries, concedes gas demand will fall even with coal exit
