Meridian Energy to partner with AGL in developing

Meridian Energy to partner with AGL in developing

Southern Hemisphere’s largest wind farm

New Zealand's largest renewable electricity generator, Meridian, and Australia's largest renewable electricity generator AGL today announced the establishment of a joint venture to build what will be the southern hemisphere's biggest wind farm.

The project is the 420 MW Macarthur wind farm in southwest Victoria. The final build cost will be around A$1 billion and is due for completion in 2013.

Meridian’s 50 percent investment share in the project will be made through a combination of equity and project finance which will be sourced by the joint venture partners.

Meridian chief executive Tim Lusk said today the investment was consistent with Meridian’s Australian wind investment strategy, which earlier this year saw the company acquire the 70 MW Mt Millar wind farm in South Australia.

“The Macarthur project is a great opportunity to facilitate our growth ambitions in Australia. The project offers long term, reliable generation revenues which will complement the rest of Meridian’s developing Australian wind portfolio. The electricity purchase contracts have been structured in a way that the joint venture does not take market price or electricity production volume risk.”

Mr Lusk said Macarthur cements a long term relationship between Meridian and AGL.

“This joint venture between the largest renewable developers in New Zealand and Australia, each bringing complementary skill sets to the project, gives us great confidence that it will be delivered successfully. The good cultural fit evident between the parties creates ongoing opportunities for joint development.”

As well as the Macarthur project and the Mt Millar wind farm, Meridian has a number of other high quality wind development sites in Australia.

Mr Lusk said recent changes to the Australia’s Renewable Energy Target legislation - obliging retailers to obtain a fixed proportion of their overall energy sales from renewables, - gave Meridian and AGL added confidence in the commercial viability of the project.

“Wind generation currently has a substantial cost advantage over other grid scale renewable technologies that can be practically deployed in Australia. Meridian expects wind farms will make a substantial contribution to Australian retailers meeting their renewable energy targets.”

Mr Lusk said that Meridian is looking forward to working with Vestas on this project.

“The low cost of energy and the higher installed MW with fewer turbines were the attractive propositions of the Vestas V112-3.0 MW turbine. To ensure that the V112-3.0 MW platform is the right solution for the Macarthur project, we did extensive due diligence through site visits and technical meetings. We have built a strong relationship with Vestas over the years in NZ and committing ourselves to this product shows our faith in Vestas to deliver our priorities.”

AGL CEO and Managing Director Michael Fraser says the project is an exciting development that will significantly contribute to the delivery of Australia’s 2020 expanded renewable energy target.

“The recent passage of the RET legislation through Federal parliament has provided investment certainty for Macarthur and other renewable projects. Together with Meridian and our contractors we will continue to work with the local community to deliver clean renewable energy that has the capacity to power 220,000 Australian homes,” he said.

The Premier of Victoria, John Brumby, has welcomed the announcement saying: “This Government is committed to tackling climate change, and the Macarthur Wind Farm will contribute to making a real difference to the environment, not only for Victorians, but for all Australians.”

As part of the development AGL will establish a Macarthur Wind Farm Community Fund which will operate from commencement of construction and for the life of the wind farm. Leases with the landowners are for 25 years with a 25 year right to extend at AGL/Meridian’s option.

ENDS

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