AGL, Meridian to build $1.2bn windfarm

Meridian Energy has partnered with Australian power giant AGL to build a A$1 billion ($1.12 billion) wind farm in Victoria, Australia.

Meridian claims the 420 megawatt 140 turbine Macarthur wind farm in southwest Victoria will be the biggest in the southern hemisphere.

It comes after Meridian bought the 70 MW wind farm in South Australia for A$191 million in May.

The project would be run as a 50/50 joint venture with AGL, funded through a combination of debt and equity.

Meridian chief executive Tim Lusk said wind farm would take advantage of recent law changes in Australia requiring power retailers sell a certain proportion of renewable energy.

''Wind generation currently has a substantial cost advantage over other grid scale renewable technologies that can be practically deployed in Australia,'' he said.

The project already has regulatory approval and construction is expected to be completed by 2013.

The wind farm will cost A$984 million to build, the cost of which would be split between the two companies. An attached A$27 millionsubstation would be be paid for and owned AGL.

AGL would have a long-term exclusive contract to buy power generated by the wind farm, allowing it to meet the new renewable energy sale target.

Meridian would not reveal the wholesale price that would be paid by AGL or the length of the contract.

Meridian would not comment on how much debt it would take on to fund the wind farm but AGL has said it will fund its portion from ''existing balance sheet capacity''.

AGL managing director Michael Fraser said the joint venture would combines the experience and complementary skill sets of the largest renewable developers in Australia and New Zealand.

''I have great confidence the partnership will deliver significant benefits for both parties,'' he said.

Meridian late last year missed out on a resource consent for its Project Hayes development of 176 turbines with the ability to generate up to 630MW of power in Central Otago but has since appealed that decision.

- © Fairfax NZ News