A bid has been made by Tilt Renewables Ltd (NZX & ASX: TLT) into the Victorian Renewable Energy Auction Scheme (VREAS) for a portion of output from the fully permitted Dundonnell wind farm auction scheme.
In mid-2016 the Victorian Government committed to the Victorian Renewable Energy Target (VRET) of 25% of energy generation in the State by 2020 and 40% by 2025.
To meet this target, the Victorian Government was seeking to contract up to 650 MW of new renewable energy capacity under the VREAS. The outcome of this process was expected by July this year.
Tilt said participation in the VREAS presents an opportunity to secure a 15 year contract from the Victorian Government which will provide price certainty for a portion of Dundonnell’s generation output which will underpin the investment decision to proceed.
Should Dundonnell be awarded a contract under the VREAS, construction would begin in late 2018 with an estimated total construction cost of about $A600 million.
Dundonnell would take in 80 turbines with nameplate capacity of 336 MW, and would increase Tilt Renewables’ generation portfolio capacity by more than 55% once completed. Dundonnell should power the equivalent of 140,000 homes.
The project site is about 15 kilometres from the Salt Creek wind farm, currently under construction in western Victoria.
Tilt Renewables’ current expectation is that it would fund Dundonnell and the associated VREAS bid using a combination of new corporate debt and an equity raising together covering the full estimated construction cost.
As part of the preparation Tilt has secured a fully committed debt package from National Australia Bank Ltd and The Bank of Tokyo-Mitsubishi UFJ, Ltd. which, following completion of standard conditions, will be available to fund about half of Dundonnell construction costs.
Companies mentioned in article