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PowAR targets backed-up renewables after $3bn Tilt deal

The AGL Energy-backed Powering Australian Renewables consortium will offer “firmed” clean energy supplies to industrial customers after completing its $3bn Tilt Renewables takeover even as the group warned that controversial energy reforms may derail investment in the sector.

The Powering Australian Renewables (PowAR) group – owned by AGL, the Future Fund and the Queensland government’s QIC – snapped up Tilt in April for $3bn, handing it a string of wind and solar farms and a big pipeline of undeveloped projects.

PowAR hopes to mirror a move made several years ago by Snowy Hydro by eventually creating reliable supplies from its wind and solar farms through back-up from batteries and other storage options which are able to generate electricity on demand.

“It’s a limiting market if you’re just selling variable green electrons. It’s a much bigger market if you’re able to also sell firm green electrons that are competitively priced,” PowAR chief executive Geoff Dutaillis told The Australian in an interview to mark the completion of the Tilt deal. “I’d like to see us doing that within a two-year window.”

The Tilt deal means PowAR has capacity of 1313MW across seven wind and solar farms, a further two wind farms nearly complete and a 3500MW pipeline of projects across wind, solar, battery storage and peaking capacity.

Developing a pipeline of storage assets will include batteries and possibly hydro which it has looked at in detail.

“We need the capability to be able to firm those green electrons, and storage and dispatchable generation is exactly what we need to do. We also need to think beyond project by project into portfolio terms on supplying a customer base from a portfolio of projects, not just one,” Mr Dutaillis said.

“Every connection point we have – existing and new – is a connection point for storage. We’ve actively looked at some pumped hydro opportunities in recent history on both sides.

“It’s public knowledge that Tilt have and certainly PowAR has. That’s another added benefit of scale.

“We now will have the profile that more people will talk to us because of who we are.”

Technology will create new storage options, according to the PowAR chief, and not all back-up will need to be at industrial scale.

“By the time we get to the late 2020s, other storage technologies will arguably have less issues that you have with pumped hydro. We’re already seeing a significant move in battery technology – not just lithium ion – and there are lots of other batteries and storage technologies with compressed air raising its head again.

“We want a decentralised solution, smaller units, so you’re not looking for a gigawatt of hydro. You can position a medium depth storage. So not two hours but four to six hours of storage technologies in a number of places across the national electricity market.”

Mr Dutaillis also added to the criticism of major reforms proposed for the nation’s power grid, warning of a hit to investment and growing risks for renewable developers.

Renewable investors in particular are worried about the Energy Security Board’s plan to pay coal generators to guarantee future capacity, known as a type of capacity market.

“Industry is not supportive. Of course the people who are supportive of a capacity market are the big generators who will benefit from a capacity market. They are the only ones who have come out strongly and said yes overwhelmingly and everyone else is going ‘don’t do it’,” Mr Dutaillis said.

Source: The Australian