A GLOBAL investment consortium that includes one of Canada's largest pension funds has cited the return of certainty in the renewable energy market as the trigger to build a $450 million wind farm, the third-biggest in Australia, near Ararat in south-west Victoria.
The decision was taken only after federal Parliament agreed this week to end the uncertainty that had plagued the Renewable Energy Target (RET) for more than a year and agree to a new target of 33,000 gigawatt hours (Gwh) of production by 2020.
Despite Prime Minister Tony Abbott's personal objection to wind farms and his expressed desire that no more be built in Australia, the restoration of bipartisan support for the RET will see construction of the project begin soon, with a scheduled finish date of April 2017.
The project, to be financed by shareholders Canada's OPTrust, GE, Downer Group, Partners Group and British company Renewable Energy Systems, has a projected life span of 25 years and has won a reverse auction to sell 40 per cent of its power to the ACT.
It is the first such announcement since the Abbott government threw the sector into uncertainty with a review that sought to pare the RET back from 41,000Gwh to 26,000Gwh.
The final target of 33,000Gwh was the negotiated compromise but only after a period that saw investment stalled and jobs lost.
OPTrust has been investing in infrastructure and private equity in Australia for about three years but had been holding back on renewable energy until the imbroglio was resolved.
Managing director Stan Kolenc said more investments would follow.
"We've been here in Australia for three years now investing in a number of different assets and renewables hasn't been a target for us just because of the RET uncertainty," he said.
"By virtue of the fact we are supporting this project, it is a reasonably large equity investment, we're convinced of the merit of investing in renewables in Australia."
Policy certainty key
During the stand-off, GE was one of the more vocal proponents for a deal to be struck.
President and chief executive of GE Australia Geoff Culbert said: "This is a great story of how policy certainty can unlock investment.
"This decision has immediately unlocked half a billion dollars of foreign investment into Australia."
The wind farm will employ 165 people during its construction phase and 13 people directly, once it is operating and producing enough electricity to power 123,000 homes. The consortium has established a $2 million community fund for the people of Ararat and 42 landowners will receive lease payments.
Ararat mayor Paul Hooper supported the project, pointing to the injection of up to $8 billion into the local economy during the construction phase, the community fund and other ongoing economic spin-offs such as rates. "It's not often a small rural municipality like us has investors committing $450 million in a project," he said.
Matt Rebbeck, the chief operating officer of RES Australia, said the Senate deal and the arrangement with the ACT government were both critical to the project going ahead.
As part of complicated Senate negotiations to secure the RET, the government appeased the crossbenchers with the promise to appoint a wind farm commissioner to handle complaints and an investigation into alleged health effects of the farms.
Mr Culbert said he was unfazed by the commissioner and hinted again at there being no established facts that wind farms are deleterious to health.
"We think it's important that we address the concerns with fact and science," he said.