THE country's second-largest electricity and gas retailer, AGL Energy, has bought development rights for two wind energy projects that are estimated to cost about $1.4 billion to develop.
The purchase, for $14 million, will help AGL meet its commitments under the the Federal Government's renewable energy target regulations, the company said in a statement to the Australian Securities Exchange.
The projects are the 63-megawatt Oaklands Hill venture in Victoria and the two-stage, 500-megawatt Coopers Gap plant in Queensland.
Investec, a South African investment bank, estimated in September tha Oaklands Hill would cost $210 million to develop, and that Coopers Gap would cost at least $1.2 billion. The Government has pledged to introduce a target to increase use of renewable energy to 20 per cent of electricity supplies by 2020 to tackle global warming.
"There is going to be high demand for projects to meet the Federal Government's expanded renewable energy target," said the managing director of AGL, Michael Fraser. "This transaction is consistent with our strategy of acquiring a pipeline of projects that will be at the bottom end of the cost curve."
A spokesman for AGL, Nathan Vass, could not immediately comment on Investec's estimates of development costs. The Victorian project has secured planning approval, and the consent application for Coopers Gap is yet to be lodged.
Renewable energy generating plants now comprise about 27 per cent of AGL's total generation portfolio in terms of installed capacity, the company said in a sustainability report.
Investec will proceed with the development of other wind energy projects in Australia, including the Collgar venture in Western Australia, which is estimated to cost about $700 million to develop.
AAP