Synergy to provide power purchase agreement for big WA farm

AUSTRALIA: West Australia's largest wind project to date has overcome a final hurdle after the state government agreed to a 15-year power purchase agreement with state-owned energy retailer Synergy.

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The 206MW, 111 turbine on-grid Collgar farm, located near Merredin, 257 km east of state capital Perth, is a joint venture between Investec Bank and Windlab Systems. Local authorities have approved the project,  which the developers say should be completed by mid-2011.

Synergy's power purchase agreement with Collgar comes as the retailer faces a revision of its vesting contract with sister state corporation and generator Verve Energy. Synergy currently takes the bulk of Verve's power but the contract with Verve is set at below generation costs, resulting in $A300 million annual losses for the generator.

The state government is under pressure to revise Synergy's relationship with Verve, although this would result in a massive increase in electricity prices. A revised relationship could also mean that Synergy would have to buy more power from private generators, in the expanding WA energy market.

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