Investec Bails out at Belalie

In yet another sign that the wheels are falling off the wind industry gravy train, Investec has announced it wants to flog its plans for its proposed 105 turbine Hornsdale project.

The project was planned for the hills near Belalie, North of Jamestown in South Australia and drew the same hostile opposition to giant fans as seen elsewhere in SA.  SA’s Labor government – true to form – rode roughshod over locals – and approved the plans anyway.

But STT’s not sure just what Investec is offering to unsuspecting buyers?

STT’s pretty sure that Investec doesn’t have a Power Purchase Agreement (PPA) with a power retailer.

If it doesn’t have a PPA, then all it can be trying to sell are the rights attached to landholder agreements with potential turbine hosts, and its planning permit.

To STT that doesn’t sound like much of a bargain.

The other big problem for Investec – as a hopeful vendor – and the sucker, if it finds one – is that the only transmission line available to carry sparks from the Hornsdale proposal – in the unlikely event it is ever built – is already at or close to its capacity.

STT understands that the transmission line in question only has spare capacity in the order of between 60-90MW when the wind is blowing.

The same transmission line is already used to carry power from a concentration of wind farms running from Jamestown, South towards Hallett, Mt Bryan and Booborowie.  That line is – for practical purposes – full whenever the local fans are generating anything like their rated capacity.

Whoever takes on the Hornsdale project (with a nameplate capacity of 300MW) will have nowhere to send their sparks – unless an additional transmission line is built.  In a depressed energy market environment – and with SA’s economy going backwards – that’s not about to happen any time soon.

There is, of course, no market for more unreliable and intermittent wind power, in any event.  Retailers stopped signing PPAs months ago and have made it clear they will simply pay the shortfall charge payable under the RET – rather than mucking around with wind power that is delivered at crazy, random intervals.

In trying to offload Hornsdale, Investec is relying upon the “greater fool theory” – which in business investment terms simply means hoping you’ll find a sucker to take over a stinking pile of assets that you paid too much for.

dumb 3

So, it’ll cost us $900 million to generate 300MW of which we can move about 60MW, and there’s no PPA. Sounds fair – OK, it’s a deal.

****

This deal is all about bailing out before the proverbial hits the giant fan.

Here’s the Wall Street Journal’s Money Beat on Investec’s pitch to find a “greater fool”.

Investec Seeks Buyer for Australian Wind Farm
Money Beat
The Wall Street Journal
Gillian Tan
21 August 2013

Following a restructure of its Australian business, Investec Ltd is seeking buyers for a wind farm estimated to cost 900 million Australian dollars (US$813 million) to build.

“If I could divest it at a reasonable price, I would immediately,” Investec Australia’s Acting Chief Executive Ciaran Whelan said in a phone interview Wednesday, referring to the bank’s ownership of development rights to the Hornsdale wind project in South Australia state.  “Our hope is to exit it at some stage, and our project finance team will look for opportunities to do so,” Mr. Whelan added.

Investec Australia’s Head of Project and Infrastructure Investment Mark Schneider was among 50 layoffs that have occurred over the past week as the South African bank seeks to return its Australian unit to profitability.

The Hornsdale project involves the construction of 105 turbines with a capacity of 3 megawatts each, ranking it among the biggest proposed wind farms in Australia, which is striving to reduce a reliance on burning dirty coal for power.  It’s expected to operate for 25 years, and is projected to save 1.25 million tons of carbon emissions a year that would otherwise come from burning fossil fuels.  It’s expected to produce 1.05 million megawatt hours a year of electricity–equivalent to the needs of around 180,000 homes.

Wind energy has struggled to compete with cheaply available coal and natural gas in Australia until now, despite legislation introduced in 2009 that set a mandatory target to source 20% of national power needs from renewable sources by 2020.

However, deal flow in Australia’s clean-energy sector has surged over the past year as investors gain comfort they can generate returns from renewable energy projects.  In addition, the price gap between wind power and natural gas is closing as more gas supply is earmarked for the lucrative export trade.

In June, Malaysia’s Malakoff Corp. Bhd. said it would pay A$650 million for a 50% stake in the Macarthur wind farm, operated and co-owned by AGL Energy Ltd.  The same month, Thailand’s Electricity Generating PCL, or Egco, made its first foray into the Australian market in a deal which valued the Boco Rock wind farm at around A$350 million.  In May, Canada’s Northleaf Capital Partners and Australia’s Palisade Investment Partners, paid around A$228 million for a 75% stake in the Waterloo wind farm.
The Wall Street Journal, Money Beat

The piece above was clearly written by – or with the fulsome instructions of – the hopeful vendor.

The nonsense about striving to burn less coal by building wind farms – and wind power being competitive with gas fired power – can only have been written by a wind weasel looking to flog a windfarm project in a hurry, or the Clean Energy Council.

In the bargaining that leads up to a contract for sale, statements of the kind that appears in the piece above are referred to as “puffery” – an effort to pump up interest in what’s on offer.  No sensible buyer actually believes what’s being said – unless, of course, they’re a greater fool than the vendor.

As to the future of wind power in Australia, the proof is in the pudding, as they say.

If outfits like Investec are so comfortable with investment opportunities for wind power in Australia, why are there only 90 turbines being erected in Australia at the moment with no plans to build any more?

And if there is such a great future for wind power in Australia – if there is no uncertainty and no risk – then why sell now?  And why sack 50 people, including your head boy?

Could it be an effort by Investec to flog its Hornsdale project before the Coalition takes office in a fortnight’s time and gets stuck into the wind power scam with its promised RET review?

STT thinks that Investec has just yelled, “Geronimo” to signal that the great wind farm bail out has just begun.

Parachutes airborne invasion

The great wind farm bail out started at Belalie.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. cornwallwindwatch says:

    Reblogged this on Cornwall Wind Watch.

  2. Name Required says:

    STT, perhaps some name changes are in order and a new jingle or two?

    Investec to Divestec, Indigestec, Go Westec
    Vestas to Asvestos, (we axe the facts in a single blow)
    Acciona (waiting to happen)
    Wand Energy (a sustainable ‘necessary illusion’, an energy black hole sucking in green dream treasure)
    Goldwand, Hepburn Wand, Siemens Wand, perhaps?

    Well done STT for continuing to expose the charade of this abusive, unscrupulous, unethical wind industry and its bullies and cronies. And Governments falling over themselves to serve their own and Corporate interests, nothing new there.

    It has always been about the money (the subsidies, our taxes) and not about neighbours, hosts or saving the planet, as is plain to see.

    This is an unsustainable Ponzi vortex big time. It will be revelatory to see what the corporate turbulence churns in its wake, the extent of professional negligence on the part of acousticians, the pervasiveness of corruption of politicians (local, state and federal and green), government departments and EPA’s.

    Bring on the Royal Commission/ICAC to get to the core of this rort and stop the abuse of citizens by their own Governments.

  3. Jackie Rovensky says:

    The future looks good, but there is always someone ready to believe they can make a quick pocket full of money.
    Until the Government stops the rort of our hard earned money being paid to these companies there will always be someone ready to take it and run.
    That so many companies are gaining permission to erect these destructive machines and then want to sell them on, well its obvious they have spent money they do not have on an ‘investment’ they know has little chance of making them a decent profit, especially IF the RET is reduced or withdrawn, or strict conditions and proof of purported energy outcomes are met, and environmental and impact conditions are met BEFORE any money is paid.
    We need to keep the pressure on and keep getting the truth out there so any possible ‘investors’, know the danger they could be facing if they choose to sink money into this industry here in Australia. We also need to keep the pressure on showing that we are a force to be dealt with, that the citizens of this country are not going to sit down and let them destroy their lives and livelihoods without FIGHT, which will continue on even if they do erect the monsters.

  4. No, no, sadly I fear it won’t “be over by Christmas”. But hopefully the end is in sight.

    When an enemy is as well resourced as the wind weasels undoubtedly are, and they have their backs to the wall, it is never going to be easy.

    But as they say, one must “fight to uphold the right”.

  5. It is good to see all these wind weasels and greentards are strapped for cash, as it just shows that the wind industry is going south, which is exciting. I hope they go that far south that they are frozen for good, and I hope Chapman and the Clean Energy Council go with them. I hope all we have to do is get their left over money to destroy the existing turbines to spare those poor people who are suffering from the infrasound and low frequency noise from these industrial machines.

  6. On the rocks says:

    Between this and AGL canning the Silverton project the end is nigh. Pretty boy in head office of Repower/Suzlon must now realise they have been sold a pup with the proposed Ceres project on Yorke Peninsula. No amount of masters degrees can replace doing your homework.
    As the spin doctor down the road would say “them boys need a good dose of Viagra, because at the moment they can’t get anything up…….”

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