$75 MIL TO CHEAPER-THAN-COAL WIND DOWN UNDER

Denham Backs Australian Wind Power That’s Cheaper Than Coal

Sally Bakewell, May 6, 2013 (Bloomberg BusinessWeek)

“Denham Capital Management LP, a $7.3 billion U.S. private equity fund focused on mining and energy, has invested $75 million in[1 gigawatt of wind projects] in Australia, where generation from windmills has become cheaper than coal…[Denham and] Enersis Group’s Australia unit, National Power and Kato Capital Pty Ltd…[formed] OneWind Australia to focus on wind-farm development and financing…Denham is seeking to gain from the falling cost of producing power from new wind turbines as fossil-fuel electricity becomes more expensive because of high domestic gas prices, charges on carbon emissions and rising financing costs…

“The technology’s improving economics has boosted opportunities for companies including manufacturers Vestas Wind Systems A/S (VWS), Suzlon Energy Ltd. (SUEL) and U.K. developer Wind Prospect Group Ltd…The company plans to sign loans for phases of the developments later this year or early next year with the first project operational in 2015…"

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“Electricity can be supplied from a new wind farm in Australia at a cost of A$80 ($82) per megawatt-hour, compared with A$143 a megawatt-hour from a new coal-fired power plant or A$116 from a new station powered by natural gas when the cost of carbon emissions is included…Policies embraced by Prime Minister Julia Gillard’s government to sell natural gas to the priciest market and tax carbon emissions have made wind more competitive, spurring interest from companies including Chinese turbine maker Xinjiang Goldwind Science & Technology Co. Australia plans to get 20 percent of its electricity from renewable energy by 2020.

“The OneWind Australia portfolio includes the 100-megawatt Glen Innes venture, the 250-megawatt Lincoln Gap project and Cattle Hill, a 240-megawatt facility. The three have a total cost of about $800 million to be met with about 75 percent debt…[Denham] is studying other markets where wind is competing with fossil fuels…[including Brazil, South Africa,and sub-Saharan Africa]…”

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