Newsletter, May 2013, Issue 138

Hydro Tasmania is working with Chinese energy giant Shenhua on plans for 700mW of new wind generation in Australia by 2020, involving an estimated investment of $1.6 billion.

The two businesses signed a strategic cooperation agreement in Beijing in April, during a six-day Australian trade mission to China led by the Prime Minister, Julia Gillard.

The Chairman of Hydro Tasmania, Dr David Crean, and the Chairman of the Shenhua Group Corporation, Mr Zhang Xiwu, signed the agreement in the presence of the Premier of China, Li Keqiang, and Ms Gillard.

Hydro CEO, Roy Adair, said in Hobart that the strategic cooperation agreement took the relationship between the two businesses to a new level and would guide them as they worked on plans to develop, build and operate new wind farms.

He said the deal was not dependent on Australia’s present carbon-price arrangement which the coalition will end if it wins the federal election on 14 September.

“It is fundamentally founded on the continuation of the renewable energy target,” Mr Adair said, noting that there was bipartisan support for a target of generating 45,000 gigawatt-hours a year of renewable energy by 2020.

“I would say we’re fairly confident it will remain in place,” Mr Adair said.

Dr Crean said in Beijing: “This strategic agreement builds upon the excellent relationship that has developed between Hydro Tasmania and Shenhua over the past few years, with respect to Australian wind farm development.

“This follows on from the Roaring 40s joint venture involving Shenhua subsidiary Guohua and Hydro Tasmania from 2007 to 2009 where several wind farms were jointly constructed and managed in China.”

In February, the Shenhua Group, through its subsidiary Shenhua Clean Energy Holdings, acquired a 75 per cent stake in the Musselroe Wind Farm in north-east Tasmania.

The first turbines at the farm began turning in April and more will be commissioned in May as the State’s biggest wind development generates renewable energy into the electricity grid.

When fully commissioned, Musselroe’s 56 turbines will generate 168mW, enough to meet the home power needs of Burnie and Devonport.

The $395 million project has provided direct employment to more than 200 people during construction at its remote site near the small town of Gladstone. Launceston-based Haywards built the turbine towers, while Hazell Bros undertook the civil engineering works.

Hydro Tasmania maintains a 25 per cent stake in Musselroe and is responsible for the on-going management of the operation.

The Shenhua Group also has a 75 per cent stake in the Woolnorth wind farms at Bluff Point and Studland Bay in north-west Tasmania, with Hydro Tasmania retaining a 25 per cent share and managing them on behalf of the partnership.

Shenhua involvement with Hydro Tasmania is the first investment by a Chinese company in renewable energy generation in Australia.

Last year, Hydro Tasmania held public meetings on King Island seeking community support for a huge 200-turbine wind farm development, worth $2 billion.

The seven-year project, which would involve an expansion of the port at Currie, NBN connection for the island and a Basslink cable to deliver renewable power to Victoria’s energy grid, remains subject to community assent.

It could be incorporated into the Shenhua joint venture.

For further stories in this month’s newsletter, please click on the headlines.