Japanese firm buys up wind project

Australian
Monday 9/6/2008 Page: 5

THE much-delayed Bald Hills Wind Farm in Victoria, notorious for being rejected due to a perceived threat to the Orange-Bellied Parrot, has been sold to Japanese interests. And the proposed cost of the project has blown out to $300 million, with the wind farm now scheduled to operate from 2011, five years after former environment minister Ian Campbell caved in and belatedly approved the project.

Japanese company Mitsui has acquired 100 per cent of the shares of Bald Hills Wind Farm Pty Ltd, a special-purpose company that held the development rights for the planned 52-turbine project near the southern Victorian town of Wonthaggi. Melbourne company Wind Power Pty Ltd confirmed the deal to The Australian.

Wind Power director Andrew Newbold said the company planned to enter into an agreement with Mitsui to assist in the project's construction. It also expected to manage the facility once it was built by the end of 2011. In December 2006, Senator Campbell backed down and approved the project eight months after blocking it over an alleged threat to the Orange-Bellied Parrot. Senator Campbell had previously overruled advice from his own department and blocked the wind farm, citing risks to the endangered bird.

It was revealed, however, that the predicted frequency of an orange-bellied parrot fatally colliding with turbines was, at worst, once every 1000 years. Changes trumpeted by Senator Campbell did not substantially alter the project, and serious doubts remained about whether the Orange-Bellied Parrot was ever under threat from the wind farm. The company was required to move only six of the 52 turbines that had been within 2km of the coast the parrot's potential migratory path.

By the time the project was approved, its cost had blown out by $30 million to $250 million. Mr Newbold said the estimated cost of the facility was now $300 million. He defended the deal with Mitsui, saying "basically, we needed an equity partner. The message from Wind Power is we are thrilled with the transaction," he said. 'We think it's reflective of our hard work and we're looking forward to building it to enable the Government to meet its renewable energy targets." However, both Mitsui and Wind Power suggested the deal was yet to be locked down.

Mitsui said it expected to be in a position to "make a final investment decision" on the project within the next 12 months. Mr Newbold said Wind Power was "working toward financial close" over the next 10 to 12 months, with construction work to start next year. "They are obviously making a strategic investment in renewables and we hope to do a lot more projects with them," he said. "We were never going to own it outright because of the equity required and we will still be assisting in the building process.

Moreover, we will continue to manage the facility once it's constructed." Mr Newbold said the drawn out approval process for the project had been costly. "What that did was cost us a lot of money, a lot of time and it probably set the company back in its growth path a couple of years," he said. The company will contribute funding to the recovery plan for the parrot.

Mr Newbold said there had been increasing commercial interest in renewable energy since the defeat of the Howard government last year. "We are getting a call a week now from both local and international investors looking to invest in renewables since the change of government."