Thursday, 31 October 2019

RenewEconomy/ Michael Mazengarb: AMP grabs half share of Macarthur wind farm, still Australia’s biggest

AMP grabs half share of Macarthur wind farm, still Australia’s biggest

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Investment group AMP Capital has secured a 50 per cent stake in what remains Australia’s largest operating wind farm, the 420MW Macarthur Wind farm, in a deal worth $880 million with the Malaysian based utility Malakoff Corporation.
It’s one of the biggest single acquisition deals for a clean energy project in Australia, and represents a significant windfall profit for the Malaysian company. Other big wind farms are also on the market, including Snowtown 2, owned by Tilt Renewables.
AMP Capital will split the ownership of the 50% stake in Macarthur wind farm between two of its wealth funds, AMP Capital’s Community Infrastructure Fund (CommIF) and the AMP Capital Core Infrastructure Fund.
The 420MW Macarthur Wind farm is located in the south-west of Victoria being was commissioned in 2013 with 140 turbines and remains the largest wind farm in the Southern Hemisphere, although it will soon be overtaken by the 453MW Cooper’s Gap in Queensland and 530MW Stockyard Hill in Victoria.
Macarthur wind farm currently sells its generation output to AGL energy under a fixed-price power purchase agreement that will last until 2038. The wind farm produces enough electricity to power around 180,000 homes.
“We’re extremely pleased to have secured this asset for our investors. Macarthur Wind Farm is a unique and high-quality asset that meets CommIF’s objective to produce long-term, stable returns while delivering a positive social impact now and into the future,” AMP Capital Community Infrastructure Fund manager Charles Savage said.
Savage said that the wind farm presented an attractive investment opportunity for the community-focused fund, with the fixed-price power purchase agreement working to reduce the risk profile of the investment.
“The transaction marks CommIF’s first investment in the renewable energy sector. It has an attractive risk profile that provides fixed revenues that are not exposed to price or volume risk. We remain excited by the pipeline of further opportunities in social and community infrastructure projects across Australia and New Zealand in 2020,”
AMP Capital Core Infrastructure Fund manager John Julian echoed this sentiment, with the project adding to the fund’s large infrastructure portfolio.
“Macarthur Wind Farm is a terrific addition to the [Core Infrastructure Fund] portfolio. The fund aims to provide retail investors with both sustainable income and capital growth over the long term – the acquisition is well-aligned to this objective,” Julian added.
The deal represents a significant boost to the valuation of the wind farm, with the $880 million figure significantly exceeding pre-auction valuations of the half-stake of the wind farm, which were floating around $500 million after attracting interest from overseas buyers.
Meridian Energy, which developed the Macarthur wind farm in partnership with AGL Energy at a cost of $1 billion, sold the 50 per cent stake to the Malakoff Corporation in 2013 for A$659 million.
AGL Energy sold its own 50 per cent share in 2015 to Morrison & Co for $532 million.
Malakoff Corporation sought to offload its share in the Macarthur wind farm to free up the invested capital and will use the proceeds to pay down its outstanding debt. Malakoff sought the assistance of Baker McKenzie in 2018 to refinance its investment in the project.
“[The sale] provides an opportunity for Malakoff to unlock the value of its investment in the Macarthur Wind Farm,” Malakoff chief executive officer Datuk Ahmad Fuaad Mohd Kenali said.
“The group will continue to be on the lookout for potential power and water assets within and outside the country,” he added. The estimated gain will immediately help reduce Malakoff’s borrowings.”
Financial close on the deal is expected by the end of March 2020.


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RenewEconomy/Giles Parkinson: AGL signs huge battery storage deal, hails “dawn of battery age”


AGL signs huge battery storage deal, hails “dawn of battery age”

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AGL's Dalrymple North battery in South Australia.
Australian energy giant AGL has signed a major deal for battery storage that will see four large-scale batteries – each of 50MW/100MWh – developed in NSW by the Australian renewable energy company Maoneng.
The deal for a total of 200MW/400MWh of battery storage will include a 15-year contract – using innovative swap agreements – that will allow AGL to call on capacity from the batteries at a fixed price.
The batteries are expected to be installed by 2023, in time for the anticipated closure of the ageing Liddell coal-fired generator. It is a massive announcement because it heralds the arrival of battery storage as a cost-competitive option for the main grid.
AGL CEO Brett Redman says the agreement heralds a new era for the company, its customers and for the National Electricity Market (NEM).
“This is the dawn of the battery age and AGL is proud to lead the way,” Redman said in a statement.
“Australia’s energy market is undergoing significant changes and large-scale batteries like these will be pivotal in providing firming capacity in the shift between baseload power and renewables.”
AGL already has a contract with Maoneng to take half the output of the 250MW (DC) – 200MW (AC) Sunraysia solar farm in south-west NSW, which is under construction, and 200MW from other solar plants yet to be built. At least one of the batteries will be located next to the Sunraysia solar farm.
“I’m proud that we are leading the way with this step into batteries, which will be the technology of the future,” Redman said.
“This will present huge benefits for energy customers and the stability of the energy market. In total, this will help support an additional 200MW of dispatchable capacity in New South Wales.”
Redman told an investor presentation on Wednesday that battery storage was likely to follow the path of both wind and solar technologies, which he said had been seen as “funky” and appealing to “rich people and greenies” a decade ago, but were now widespread.

  • “Battery storage is now coming into its own and we are starting to see it break through,” Redman said. “We see it with the virtual power plant in South australia, where we are seeing the shared economy starting to emerge. Household batteries are starting to work.
“The Maoneng deal is good first example of something genuinely commercial (at large scale) starting to emerge in the market. It’s not without risk, but it’s a good trade off of risk and return.
“It is the beginning of that change. In 2-3 years time, well see the acceleration in storage that is just beginning to pop up. The next big thing we will be talking about is pumped hydro.”
The company later said more large scale batteries are being planned, in Queensland, NSW, Victoria and South Australia to provide more firming capacity and to help smooth out the emerging “duck curves” being created by the growing impact of solar in all state grids.
AGL already operates the Dalrymple North battery project in South Australia, which has the capacity to offer frequency and ancillary services and also create an energy “island” – along with the neighbouring Wattle Point wind farm and rooftop solar on the Yorke Peninsula in case of outages elsewhere.
That is one of two batteries already operating in South Australia, along with the Tesla big battery at Hornsdale that remains the world’s biggest at 100MW/129MWh. Two new batteries at Lake Bonney wind farm (25MW, 50MWh) and the Lincoln Gap wind farm (10MW, 10MWh) are nearing completion and commissioning.
Another two batteries have been installed in Victoria, at the Gannawarra solar farm and the Ballarat network junction, and another is being built at the Bulgana wind farm. Smaller batteries are also installed in Queensland at Lakeland and Kennedy energy hub (awaiting commissioning).
Maoneng, which also operates the smaller 13MW Mugga Lane solar farm in the ACT, said energy storage will play a critical role in balancing both the energy market and ensuring the stability of the network for Australia’s future.
“Our agreement with AGL will accelerate the country’s transition to renewable energy and help provide reliability and security for AGL customers during peak periods well into the future,” said Qiao Han Nan, the company’s group vice president.
In response to questions, Maoneng said AGL will have the ability to switch them on and off to generate power with zero notice.
However, the batteries will also be capable of playing multiple roles within the energy market, which include but are not limited to Frequency Control Ancillary Services (FCAS), Energy on Demand as well as the ability to alleviate constraints/congestions within the South-West NSW Network.
It has not yet chosen battery chemistry or supplier.
AGL’s Redman noted that the company is looking at two pumped hydro projects options in South Australia (Kanmantoo) and at Bells Mountain in the Hunter Valley, along with a possible gas firming power station in Newcastle.
It has also developed a virtual power plant program in South Australia with more than 1,000 customers signed up.

“In addition to this exciting project, we are progressing with major investments in storage and firming capacity, with more than $1.9 billion of new energy supply projects completed or in construction and another $2 billion in the pipeline,” Redman said.
See also: AGL says two units out at Bayswater coal plant, but Loy Yang back by summer


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One Step Off The Grid/Sophie Vorrath: All eyes on Australia battery market, as home storage becomes a “need”

All eyes on Australia battery market, as home storage becomes a “need”

By October 29, 2019 Battery/Storage, Electric Vehicles, Software/Gadgets, Solar 3 Comments
The SolarEdge stand at All-Energy Australia 2019. Source: SolarEdge Facebook
Australia is leading the world on distributed solar uptake, from one end of the grid to the other according to global solar inverter giant SolarEdge, and it will be no different for home battery storage.
One Step Off The Grid spoke to SolarEdge’s co-founder and VP of marketing and product strategy, Lior Handelsman, at last week’s All-Energy Australia conference in Melbourne.
The Israel-based company had a big and buzzing stand in what ranked as one of the busiest and most up-beat exhibitions of renewable energy technology in years for the annual event.
SolarEdge, which claims to be the world’s biggest PV inverter company in the world in terms of revenue, has long dominated the global residential and commercial solar markets in this segment.
But like many others in this space, it has been broadening its offering to include PV panels, smart control systems, battery storage and – as reported on The Driven recently – EV charging technology.
According to Handelsman, the company is still making the vast bulk of its revenue from its inverter sales around the world. But that is changing. And on this front, Australia is a key focus market.
In particular – and this seemed to be the feeling across the All-Energy conference – something has shifted in home battery storage uptake and smart energy management.

“So we see installers selling it better, pitching it better, and [consumers] realising that there are other values – beyond ROI – in solar plus storage, such as being sustainable, being independent and having resiliency,” Handelsman told One Step.
“We would actually see two trends that are pushing this. The first is necessity – there are markets where you have such a high penetration of solar that you cannot sell just solar any more. The market won’t allow it, or the regulation won’t allow it, or the utility or grid connection won’t allow it.
“In this market, installers have become, out of necessity, very, very good at selling storage, because a) they have no choice, and b) there is still ROI, just a little longer and sometimes different.
“The other thing which is also interesting, in my view, and I see it in Germany and Europe, is that there are people buying solar and storage in places where it doesn’t make (economic) sense to buy.
“When I ask system owners [why they do this], they tell me something that we’re not used to hearing in the solar industry, and that is ‘when I buy air conditioning I don’t think about pay-out, I need it.’
“And I say, ‘Yes, but you don’t need a battery. The grid is good, you don’t need a battery.’ And the customers says, ‘For me, not being sustainable, for me being dependent on fossil fuel energy, it’s painful. It’s painful like being cold in the winter. I need a battery’.”
In the US, Handelsman says installers are hearing the same sort of thing, but in that case it is more due to a desire to be independent from the grid, in response to the increasing threat of extreme weather events like wildfires and hurricanes that can knock out power supplies for days and even weeks.
“So people say, I need a battery… And then, on top of that, there’s a lot of value stacking, such as maximising solar self-consumption, tapping into a VPP (virtual power plant),” and, of course, powering the family’s electric vehicle.
“The EV is going to be your biggest load. In the coming 20-15-10 years, we’re all moving to an EV, and it’s going to be your biggest load in the home, so it makes all the sense to optimise that solar consumption
“And this brings us to the next stage of solar,” he says. “Solar will be the grid, your car will be the grid, and we will use solar inverters and VPPs to manage that load.
“Solar, cars, battery storage, it’s all going to be one thing.
“What we’re doing now will determine how our grid will behave 10, 20 years from now. It’s super exciting for us. And in all of this, Australia is one of the leaders, it’s not a laggard,” Handelsman says.
“We see more understanding, openness and experimentation on the grid in virtual power plants here, pretty much than any other place in the world.
“There’s lots of openness in Australia, less fear. In some places in the world there’s lots of fear.
“Australia is definitely not a laggard in this. But it also makes sense to be careful, nobody wants lots of outages.”

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3 Comments

  1. Keith Heale
    A home battery still seems to me like a $12,000 bucket for $2 worth of electricity. It has to be filled and emptied an awful lot of times to make any sort of economic sense. It’s also not much use for charging an EV because the battery in the car is typically four to six times larger capacity than the home battery. However one thing that could make sense under the right circumstances is using an EV as a home battery, charging it during the day from solar panels and “borrowing” some charge during the night to reduce the demand on the grid, or even to send some energy back into the grid! Of course this assumes that the EV is able to be charged during the day.
    Reply
  2. ozfred
    What the new systems enable is the use of solar generated electricity during grid outages. While 7 or more kwH of storage would be “nice”, I would settle for the enhanced controller and 1 kwH to handle the numerous 3 second switching outages and have reasonable daytime power through longer outages.
    Ask the PV panel owners in California about my first sentence…..
    Reply
  3. John Wass
    Using Block chain technology , why not could a households excess solar energy be used to recharge their EV from any power outlet that is connected to the grid I E at work ? Perhaps a small payment per klwh to the grid operators for using their infrastructure ? Then the household could use this energy in their home during peak times. The E V will then be the home battery.
    Reply

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