TSI Fund’s strong results in our first year of operation demonstrate the high quality of our portfolio of essential infrastructure assets and its substantially contracted revenue streams. This result allowed TSI Fund to exceed PDS distribution guidance.
Our portfolio of assets outperformed against expectations for the year. Kemerton, Townsville and Kwinana power stations all performed strongly. The performance of Collinsville Power Station was impacted by the worst flooding in Queensland in 30 years. Transfield Services, as operator and maintainer of Collinsville, kept the power station running even though there was an impact on coal supply for power generation.
A highlight of the year was our entry into the renewable energy sector. We purchased four wind farms in late 2007. The wind farms – Mt Millar and Starfish Hill in South Australia, Toora in Victoria and Windy Hill in Queensland – have a capacity of 137.5 megawatts. We are now the second largest provider of wind energy in Australia.
The 50 per cent acquisition of Emu Downs Wind Farm remains subject to the Queensland Government securing the necessary approvals.
A key differentiator for TSI Fund is the value we derive from our relationship with our Manager, Transfield Services who provide asset management services and upgrades to assets. This was demonstrated during the year on a number of projects.
Transfield Services completed an upgrade to Kemerton Power Station in Western Australia, ahead of time and on budget. Its innovative solution improved efficiency and increased Kemerton’s capacity by 40 megawatts in high summer temperatures, providing power to an additional 10,000 households while reducing greenhouse gas emissions.
We will upgrade the turbine blades at Townsville Power Station later this year, increasing capacity by 10 megawatts to 250 megawatts. We have amended the power purchase agreement with AGL/Arrow to account for this additional capacity.
We are jointly developing a portfolio of new wind farm projects with Transfield Services. The portfolio of 13 wind farms is an attractive pipeline of high quality sites. Wind is the most commercial source of renewable energy and this portfolio has the potential to boost Australia’s renewable energy by up to 1,150 megawatts, providing power to more than 500,000 homes. This builds on our leading position in the growing renewable energy sector.
TSI Fund has performed strongly in our first year of operation. We are well positioned to take advantage of future opportunities in the changing Australian energy market.
We are reviewing the efficiency and sustainability of our assets following our first year of operation. Our focus for FY2009 is the wind farm development portfolio and upgrades of existing assets.
Thank you for your support of TSI Fund.
Steve MacDonald
Chief Executive Officer
