Australian Venture OneWind Plans $2 Billion in Power Projects

OneWind Australia, a venture backed by private equity fund Denham Capital Management LP, expects the first of as much as $2 billion in wind farms it plans in the country to start operating by 2015.

OneWind is developing five wind projects in New South Wales, Tasmania, South Australia, Western Australia and Queensland states, Managing Director Michael Toke said yesterday in an interview in Sydney. The wind farms would have a combined capacity of as much as 1,000 megawatts, with the 100-megawatt Glen Innes plant in New South Wales, Australia’s most populous state, expected to be first, he said.

OneWind is also studying wind and diesel hybrid projects in Australia at sites that aren’t connected to the electricity grid and will consider expansion in regions including Europe, Toke said. The venture plans to take advantage of the declining cost of wind power in Australia and the country’s policy to get 20 percent of its power from renewable energy by 2020.

“Compared with other places in the world, wind is quite competitive in this market,” Toke said. “It’s a combination of the competitiveness of wind and the need for new renewables here. There’s an opportunity to generate good returns.”

Electricity can be supplied from a new wind farm in Australia at a cost of A$80 ($77) per megawatt hour, compared with A$143 a megawatt hour from a new coal-fired power plant or A$116 from a new station powered by natural gas when the cost of carbon emissions is included, according to a Bloomberg New Energy Finance report published in January.

Wind Costs Competitive

The wind projects, which may cost between $1.5 billion and $2 billion if they’re all built, will need to reach power-supply agreements, Toke said.

Shenhua Group Corp., China’s biggest coal producer, and Hydro Tasmania could jointly invest A$1.6 billion by the end of the decade to build Australian wind farms, Hydro Tasmania said in April.

Denham, a $7.3 billion U.S. fund focused on mining and energy, agreed to invest $75 million in the portfolio of Australian wind power projects under development, joining with Enersis Group’s Australian unit, National Power and Kato Capital Pty to form OneWind, the company said this month.

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