Aus & NZ: Bidders await the nod from Snowy Hydro auction

27 June 2018 - 12:00 am UTC

The race for Snowy Hydro’s renewable auction is heating up with infrastructure investors and energy developers facing off for a slice of the 800MW offtake pie.

Expressions of interest were handed in Tuesday last (19 June) with infrastructure funds including Palisade Investment Partners, Infrastructure Capital Group (ICG) and developer Edify Energy among the slew of bidders vying for the prize.

The federal government–owned Snowy Hydro went to market last month with an 800MW renewable energy auction split 50:50 into 400MW wind and 400MW solar power for its retail businesses, Red Energy and Lumo Energy.

Although Snowy Hydro would not comment on the bids, it seems likely the auction was heavily oversubscribed, similar to recent renewable tenders put out by the Queensland and Victorian state governments.

Snowy Hydro are expected to circulate RFP’s to the shortlisted bidders on 3 July with a final bid deadline set for 25 July. The winner will be chosen in August – if the gentailer sticks to its original deadline. Bidders have not yet heard back on the fate of their offers, sources close to the matter have indicated.

It wants to have final contracts signed off by October. Unlike recent state renewable auctions, corporations are far likelier to stick to their deadlines, one source with experience in such processes said. “I have more faith [in corporates] than in governments.”

Palisade Investment Partners is understood to have put forth a number of generators for the auction, including its 148MW Ross River solar farm, Inframation understands. The AUD 225m (USD 166m) generator near Townsville, Queensland is 80% contracted – holding a PPA with Energy Australia running until 2030.

Solar developer, Edify Energy, also threw its hat in the ring, and are thought to have submitted multiple projects. Projects in its portfolio include the in development 275MW Darlington Point Solar Farm in NSW, and several in Queensland including the 180MW Daydream Solar farm, which is due to become operational in August. 

ICG is one of the biggest infrastructure investors in the Australian clean energy scene and has several assets within its portfolio in need of a long term offtake contract.

While the team at Snowy Hydro sift through the EOI’s, the 50/50 split between wind and solar could be open to change, depending on the pricing received, as reported.

Queensland auction still on hold

Separately, there has still been no noise from the Queensland government camp on its 400MW reverse auction, despite bids being lobbed in nine months ago, according to sources familiar with the matter.

Earlier this month, the Queensland government sent an email to bidders seen by Inframation, which suggests the project that went to market in mid-2017 is firmly on hold. “We acknowledge that it has been some time since the closing of the expression of interest and appreciate you might be investigating alternative commercial arrangements for your project(s). We fully support you seeking opportunities available within the existing market framework.”

The email goes on to say “you will be informed as soon as a decision has been reached on the next steps.”

The Palaszczuk government are thought to be grappling with the bid price of storage, which was not in line with expectations – forcing them to rethink the entire auction.

However, one bidder who submitted a project admitted no surprise about the hold up. “Its early days for storage buts its developing quickly. Generation is easy but storage is much harder. [The challenge] is how do you dispatch as needed?”

Snowy Hydro