Eco Investor November 2017

Pre-Dividend Securities

Windlab Begins Building Big New Wind Farm

Shares in newly floated Windlab have continued to fall and the $2 shares touched a post IPO low of $1.47 in late October, only two months after listing.

This was despite the company announcing that construction is to begin on its $160 million Kennedy Energy Park hybrid wind and solar energy project in north Queensland. The shares have since turned up and are now around $1.70.

The begining of construction follows the project securing financing from the Clean Energy Finance Corporation and the Australian Renewable Energy Agency and reaching financial close. The project is a joint venture between Windlab and Eurus Energy Holdings of Japan.

Kennedy Energy Park will be the first wind, solar and storage hybrid generator connected to the national electricity network via a single connection point. Windlab said that globally it is an industry leading project and "will demonstrate the complementary nature of the three technologies in providing high penetration renewable energy with significantly less variability than the individual components and delivering an energy profile which closely matches average network demand."

Kennedy will have 43.2MW of wind, 15 MW AC single axis tracking solar, and 4 MWh of lithium ion battery storage. It will use 12 Vestas 3.6MW turbines at a hub height of 132 metres; the largest wind turbines to be deployed in Australia. The lithium ion storage will be provided by Tesla. The project will take a little over 12 months to construct and is expected to be fully operational before the end of 2018.

It will generate around 210,000 megawatt hours of electricity per annum – enough to supply more than 35,000 average homes.

"We believe Kennedy Energy Park will demonstrate how effectively wind, solar and storage can be combined to provide low cost, reliable and clean energy for Australia's future," said Roger Price, Windlab's executive chairman and chief excutive. "The broader adoption of projects like Kennedy can address the recommendations of the Finkel review and ensure that Australia can more than meet its Paris Commitments while putting downward pressure on energy prices."

Project equity is being provided equally by Windlab and Eurus Energy. The Clean Energy Finance Corporation is providing $93.5 million of debt finance and the Australian Renewable Energy Agency is providing $18 million as a subordinated refundable grant.

The power purchase agreement is with CS Energy, which will purchase all of the electricity and some of the Large-Scale Generation Certificates for 10 years. (ASX: WND)







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