Bloomberg News

Southern Hemisphere’s Biggest Wind Project Set to Start

November 22, 2012

AGL Energy Ltd. (AGK), Australia’s largest operator of renewable energy projects, expects its A$1 billion ($1 billion) Macarthur wind farm to be operating fully in February as the country seeks to reduce it reliance on coal.

“It’s on time, on budget and, in fact, may well be completed a little ahead of schedule,” Managing Director Michael Fraser said Nov. 21 in an interview in Sydney.

Sydney-based AGL and partner Meridian Energy Ltd. are starting the 420-megawatt Macarthur project in Victoria state, the largest wind farm in the Southern Hemisphere, as Australia moves toward its goal of getting 20 percent of its power from renewable energy by 2020. The company expected Macarthur to be completed by the end of March 2013, Fraser said.

AGL expects to get government approval for its Gloucester coal-seam gas project in New South Wales state early next year. It faced a blockade last year at that project organized by environmental protester, farmers and politicians who were concerned that drilling for the gas would damage aquifers and contaminate and deplete water supplies.

“We’ve still got people who are protesting, but we’re not being blockaded,” Fraser said. “We’re getting on with the job. If we don’t develop new sources of gas, I don’t know where New South Wales is going to get the molecules from come 2017.”

Surging Gas Price

The Australian electricity and gas retailer expects the New South Wales government to decide early next year whether to approve its plan to expand the Camden natural gas project.

With natural gas prices on the east coast of Australia projected set to double and the government’s price on carbon emissions discouraging fossil fuels, the cost of gas-fired power stations may converge with that of wind farms, he said.

Australia in July started charging about 300 of its largest polluters a fixed price of A$23 a ton for their carbon emissions. It plans a market-based system beginning in 2015.

Gas prices on the east coast of Australia are forecast to double to about A$8 a gigajoule in about 2016 or 2017 from about A$4 gigajoule now as projects in Queensland ship liquefied natural gas to Asia at prices linked to oil, he said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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