TSI Fund purchased four wind farms in December 2007 – our first acquisition since listing on the ASX in June 2007. We are now the second largest provider of wind energy in Australia with a capacity of 137.5 megawatts.
Our investments in renewable energy are environmentally and commercially sustainable.
Wind is the most commercial source of renewable energy. It is safe, clean and offers an inexhaustible supply of fuel for power generation. As a fuel source, wind is not subject to price volatility and once developed, the running costs of wind farms are low.
Australia has the coastline and latitude to be a leading producer of wind energy and as the Australian Government’s National Renewable Energy Scheme (NRETS) is introduced, wind farms will become an increasingly attractive investment.
The four wind farms were purchased from Queensland state-owned generators Tarong Energy and Stanwell Corporation. The 50 per cent acquisition of a fifth wind farm, Emu Downs in Western Australia, remains subject to the Queensland Government receiving the necessary approvals.
Starfish Hill, Toora and Windy Hill are high quality mature assets which are meeting performance expectations. Mt Millar Wind Farm in South Australia is an outstanding asset with leading edge technology. TSI Fund is in the process of ramping up Mt Millar to its full capacity of 70 megawatts, expected during the fourth quarter of 2008.
Our wind farms produce enough energy to supply more than 64,000 homes. By harnessing the natural resource of wind, our wind farms reduce Australia’s greenhouse gas emissions by more than 325,000 tonnes of carbon per year.
Renewable energy schemes
Australian Government renewable energy schemes allow producers of renewable energy to sell the power generated and obtain Renewable Energy Certificates (RECs). Energy retailers are required to purchase RECs to meet renewable energy targets.
The power and the RECs generated by the wind farms are contracted through offtake agreements with some of Australia’s major energy retailers including AGL, Ergon and Energy Australia.
The offtake agreement for Starfish Hill Wind Farm ends in December 2008. There is significant potential for revenue growth as this and other contracts expire.
Growth opportunities
Transfield Services’ wind farm portfolio has the potential to double Australia’s current wind generation capacity. TSI Fund has the first option on any wind farm developed from this portfolio. It is one of the largest wind development portfolios in Australia, with up to 1,150 megawatts of capacity and the potential to provide power to more than 500,000 homes. All 13 sites are located in high wind areas across mainland Australia. Wind monitoring is ongoing at all sites.
TSI Fund will leverage Transfield Services’ experience in developing and managing power assets in the development of the portfolio.
The first wind farm development is Barn Hill in South Australia, which we expect to be operational in 2011.
Looking ahead, the value of our investment in wind farms should be enhanced by the Australian Government’s target of 20 per cent renewable energy by 2020.
| capacity (megawatts) | number of turbines | homes powered | Offtaker |
TSI Fund ownership | |
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| Mt Millar Wind Farm | 70 | 35 | 36,000 | Energy Australia | 100 per cent |
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| Starfish Hill Wind Farm | 34.5 | 23 | 18,000 | AGL and Hydro Tasmania | 100 per cent |
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| Toora Wind Farm | 21 | 12 | 6,600 | Energy Australia | 100 per cent |
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| Windy Hill Wind Farm | 12 | 20 | 3,500 | Ergon Energy | 100 per cent |