Australian
Monday 6/4/2009 Page: 24
A SUDDEN fall in the level of international investment in windfarms has dramatically reversed the rising costs and supply chain delays that were affecting the industry, and placed cashed-up renewable energy developers in a strong negotiating position with suppliers now facing cancelled orders and distressed sales.
This was illustrated this week when AGL pressed the green button on the 132MW Hallett 4 windfarm in South Australia, with an estimated cost of about $340 million. At about $2.57 million/MW, this comes in nearly 10% cheaper than the Hallett 2 windfarm, which was approved just over a year ago.
AGL likes to sell the windfarms after completion, and analysts at Citi this week estimated AGL could probably make an $80 million development profit on the project, even with the higher cost of capital in the current environment.
AGL has also negotiated similar pricing for the wind turbines from Suzlon Energy for both the 80MW Hallett 3 and 63MW Oaklands project in Victoria, and could obtain a further volume discount if it commits to both windfarms. AGL has another 10 possible windfarm projects totalling some 1800MW under consideration.
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