Power purchase contract for 89 MW in Western Australia

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West Australian utility Alinta has signed a power purchase agreement with Renewable Power Ventures (RPV) to develop an 89 MW wind farm 35 kilometres south-east of Geraldton. The A$200 million wind farm of 54, NEG Micon 1.65 MW turbines will be the largest wind farm in Western Australia. Construction is expected to begin in July with the first electricity feeding into the grid in mid-2005. Under the agreement, Alinta, a gas distributor and energy retailer, will take all the energy produced by the wind farm. "It is a win-win situation where we can provide our customers with cheaper and cleaner electricity while securing a good commercial return on the project," says Alinta's Bob Browning, adding the company plans to investigate and develop other green electricity projects in Western Australia. The project will bring about A$30 million into the state economy and create about 200 jobs during construction. Browning warns, however, that the state government's introduction of top-up-and-spill (TUAS) market rules as part of its electricity reform agenda is vital to the project's success. Being developed specifically for the Western Australia market, TUAS is a balancing arrangement where generators can buy power shortfalls (top-up) or sell power contracted for but surplus to needs (spill). "The state has indicated it is proceeding with TUAS, despite the decision to abandon some elements of its reform agenda and the power purchase agreement is conditional upon the TUAS rules being introduced," says Browning. Meanwhile, RPV -- a project company jointly owned by Western Australia's Carbon Solutions, National Power of California, and international bankers Babcock & Brown -- is seeking financial close. Along with Alinta, it is also pursuing agreements with Western Power's networks division ahead of the deal reaching unconditional status.

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