AGL Energy Limited (AGL) today announced it has sold the 71 MW Hallett 2 wind farm to Energy Infrastructure Trust (EIT) managed by ANZ Infrastructure Services (ANZIS) in a transaction that will see AGL retain all Renewable Energy Certificates, electricity output and asset naming rights until 2035.
Using a transaction structure similar to AGL’s December 2006 sale of the Hallett 1 wind farm, EIT will acquire Hallett 2 and fund all remaining development and construction costs. EIT will own the wind farm, while AGL will buy all of the electricity and Renewable Energy Certificates produced, as well as operate and maintain the facility.
AGL Managing Director Mr Michael Fraser said that providing EIT with long-term revenue and cost certainty allowed AGL to realise a development profit of $59 million. Between $35 million and $40 million will be recognised in FY2009, with the balance in FY2010. AGL’s existing underlying profit guidance for FY2009 of $360-$390 million already incorporates the development profit for FY2009.
Mr Fraser said: “The sale of the Hallett 2 wind farm is consistent with the company’s integrated strategy. We are very pleased with this outcome, especially in light of the current credit market environment. The transaction certainly demonstrates there is a solid appetite for quality projects of this nature which deliver benefits to both parties.”
ANZIS Managing Director, Mr John Clarke, said: “This is a high quality investment, ideally suited to our investors. With our Wattle Point wind farm in South Australia similarly contracted to AGL, the renewable assets in EIT now total 200 MW.”
From a cash flow perspective, the sale relieves AGL from ongoing development capital expenditure funding which is forecast to be approximately $117 million from September 2008 through to anticipated project commissioning in January 2010.
Mr Fraser said: “This transaction again demonstrates the viability of our wind farm development strategy which will continue to deliver ongoing development profits. I anticipate we will roll out a wind farm development every 12 to 18 months utilising our growing project development skills.
“These developments also enable us to secure all of the vital operations, output and naming rights while extracting a development premium over and above the cost of construction.”
The Hallett 2 wind farm is currently under construction on the Hallett Hill range approximately 20km from Burra in rural South Australia. It will utilise 34 Suzlon S88v3 turbines and is being constructed by Suzlon under a fixed price turnkey contract.
AGL is Australia’s largest private owner and operator of renewable energy assets with approximately 900 MW of capacity currently in operation. The Hallett 1 wind farm (95 MW) was commissioned in June 2008 with Hallett 3 (117 MW), Hallett 4 (189 MW) and the Macarthur (330 MW joint venture) wind farms currently under development.
Mr Fraser said: “AGL has a substantial pipeline of identified growth opportunities which includes up to 2,600 MW of renewable energy generation and up to 1,600 MW of gas generation development projects. Our fast growing renewable energy portfolio places AGL in a market leading position to benefit under the expanded Renewable Energy Target, a policy that will, in AGL’s opinion, contribute significantly to reducing Australia’s greenhouse gas emissions and is an integral complementary policy to the Carbon Pollution Reduction Scheme.”
Hallett 2 Wind Farm – KEY FACTS
| Location |
220km north of Adelaide |
| Total construction cost |
$159 million (including $42 million already spent by AGL) |
| Contractor |
Suzlon Energy Australia Pty Ltd |
| Turbines |
34 x 2.1 MW S88v3 |
| Size |
88m diameter, 80m hub. Tip 124m |
| Landowners |
Agreements with five landowners for 25 years of operation |
| Employment |
Up to 80 during construction, 5 during operation |
| Capacity |
71.4 MW |
| Capacity factor |
Approximately 40% |
| Average wind speed |
8.6 m/s |
| Expected output |
Approximately 250GWh p.a. |
| Construction schedule |
Completion scheduled for January 2010 |
| Risk and benefits allocation |
AGL assumes wind risk and O&M risk. All electricity and REC revenues are to AGL’s account |
| Electricity + REC off-take price in 2010 |
$99/MWh |
| Current 2010 forward price for electricity + RECs |
$115/MWh |
| Development profits1 |
Total of $59M with $35-40m in FY09 and the balance in FY10. AGL’s existing FY09 underlying profit guidance of $360M-$390M incorporates the Hallett 2 FY09 development profit |
1. In accordance with accounting standards development profits are recognised on a percentage of completion basis.
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Further enquiries:
Media
Nathan Vass Senior Adviser Media
Direct: + 61 2 9921 2264
Mobile: + 61 (0) 0405040 133
e-mail: nvass@agl.com.au
Analysts & Investors
Graeme Thompson, Head of Investor Relations
Direct: + 61 2 9921 2789
Mobile: + 61 (0) 412 020 711
e-mail: gthompson@agl.com.au
About AGL
AGL is one of Australia's leading integrated energy companies. Drawing on 170 years of experience, it includes retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has Australia's largest retail energy and dual fuel customer base. This includes customers supplied with gas and electricity through AGL's joint venture partnership with ActewAGL. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. One of Australia’s largest renewable energy producers, AGL is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.
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