Melbourne consortium underwrites windfarm in Australian-first deal

Three Melbourne councils, two universities, Zoos Victoria, and half a dozen corporations have banded together to underwrite a windfarm in western Victoria that will power some of the city’s most recognisable buildings.

The group of 14 organisations, led by the City of Melbourne, has agreed to purchase half the power produced by a new 39-turbine, 80MW windfarm near Ararat, about 200km west of Melbourne.

It is the first time a group long-term power purchase arrangement has been used to fund a renewable energy development in Australia, and the City of Melbourne’s deputy mayor, Arron Wood, said he hoped other local governments would adopt the model.

”The group, which includes Australia Post, the National Australia Bank, Federation Square, Melbourne University, RMIT, and the Yarra, Port Phillip, and Moreland councils, put the idea to the energy market last year during the review of the national renewable energy target.

The winning tenderer was Pacific Hydro, which is currently finalising construction contracts for its Crowlands windfarm and aims to have it online by June 2019.

The project is in addition to the 650MW of large-scale renewable energy developments to be funded through the Victorian government’s reverse auction process.

Under the Melbourne renewable energy project agreement, announced on Thursday, the group will purchase 88 gigawatt hours of power a year, the amount needed powering 17,000 homes.

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