After a two-year hiatus, the Clean Energy Finance Corporation has stepped back into wind farm investment, making a cornerstone $67m investment in the Ararat Wind Farm. This has facilitated co-investment from large international players from Japan and Canada to deliver hundreds of local jobs and an order for 35 towers from Portland manufacturer Keppel Prince. All round great result!
Investment confidence is still reeling after the Abbott government's attacks on the Renewable Energy Target and this has meant that no new wind farms have been able to obtain finance despite the RET resolution over six months ago. The CEFC investment at Ararat is a potential template for other financiers to follow to get wind farms back on track under the RET.
New federal government mandate
The Turnbull government has now confirmed that the anti-wind directions the Abbott government issued to the CEFC have been lifted. It directs the corporation to focus on new and emerging technologies such as large scale solar but no longer prohibits investment in wind. While it expects that on-shore wind farms will mostly be able to obtain finance under the existing market, it does leave open the prospect the CEFC can step in, as it has done in Ararat, if the market fails.
Oddly, it also talks up the prospects for off-shore wind. We're pretty sceptical about this directive as, while harnessing strong, enduring winds at sea is a great idea, it's unlikely we'll see much off-shore wind in Australia for some years. It is becoming popular in UK and Europe where there are high population densities, which of course is not the case in Australia and wind energy penetration is already high. The cost of off-shore wind is more than twice that of on-shore wind in Australia so given the government's interest in keeping power prices down it is puzzling that they would talk up off-shore wind's prospects.
All that said, the government is clearing away many of the roadblocks the Abbott government put in wind's way and we're hoping this will bear fruit in the new year.