Flyers Creek wind farm up in the air until completion of energy review

THE company behind an approved wind farm at Flyers Creek has reported an improved financial performance since last year, but the federal government’s renewable energy target (RET) review has kept it in murky waters.

Infigen Energy reported its full year results to June 2014 to the ASX earlier this week, including a statutory net loss after tax of $8.9 million, a $71.1 million improvement from the shortfall it suffered in the year ending June 2013 due to its US business. 

However, while electricity companies are required to buy energy from renewable generators through large-scale generation certificates, Infigen’s report said their value had fallen. 

Infigen senior development and government affairs manager Jonathan Upson said under the existing target, the LGC price should be at $55, but it was currently only $26.

“It’s cutting revenue by about half, it’s a significant impact,” he said. 

The ASX report said “acute regulatory uncertainty” due to the RET review, electricity price drops following the abolition of the carbon tax and falling electricity demand would also have an impact in the coming year.

“Subject to the outcome of the RET review, the average bundled price across Infigen’s Australian portfolio is expected to be around 10 per cent lower than [the year ending June 2014] based on current forward markets,” the report said. 

Mr Upson said the review had halted large-scale projects not already under construction, including Flyers Creek. He said the company could only work through the conditions of consent from the development approval.

“No bank is going to lend $200 million for a project until the review is finished,” he said.

Mr Upson said the industry was already lobbying ministers and MPs, including member for Calare John Cobb, but he said the MP took a different view to the one Infigen put forward.

Mr Cobb declined to comment on whether he supported a drop in the target, or its abolition. 

“The government is working to keep energy costs down to take the cost of living pressures off families and keep Australian businesses competitive - renewable energy has an ongoing role to play in Australia’s energy mix,” he said in a statement.

“The RET is required to be reviewed under legislation every two years.” 

However, he also declined to comment on the flow-on effects of the review or whether he was concerned about the Flyers Creek wind farm’s future.

danielle.cetinski@fairfaxmedia.com.au

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