Global fund backs cheap Australian wind as local firms head abroad
Sophie Vorrath on 8 May 2013
At a time when Australian wind energy companies are turning their focus to overseas markets in the search for growth opportunities, a billion-dollar global private equity fund has announced an investment of $75 million in wind power in Australia.
Denham Capital Management, a $7.3 billion US-based fund focused on mining and energy, announced on Tuesday that it had invested $75 million in a 1GW portfolio of Australian wind power projects currently under development. Part of the deal, which remains subject to procedural closing conditions, will see Denham join existing project sponsors Enersis Australia, National Power and Kato Capital to create a separate entity called OneWind Australia.
Denham’s arrival on the scene is hoped to accelerate the development of these projects, with an initial focus on the late-stage development and financing of several of them, including Glen Innes, a 100MW wind farm in NSW; Lincoln Gap, a 250MW project in South Australia; and Cattle Hill, a 240MW development in Tasmania.
Denham has already moved to take advantage of Australia’s “metals and minerals opportunities” – as the firm’s managing partner and co-president and head of its global Power and Renewables team, Scott Mackin, has put it – and opened an office in Perth last November.
So the addition of wind assets from Australia – where, as Mackin has also pointed out, generation from windmills has become cheaper than that from coal – seems fairly obvious.
But where a global equity firm like Denham sees promise, local firms appear to find uncertainty and roadblocks. Fairfax newspapers report today that wind energy technology firm Windlab Systems – a privately held company spun off from the CSIRO in 2003 – has been prompted to look overseas for growth markets, due to ongoing uncertainty over Australia’s renewable energy policies.