Australia’s wind energy drought – no new wind farms have reached financial close so far in 2025 – is set to be broken soon after AGL Energy, the country’s biggest coal generator, signed a 15-year contract with a new South Australian project.

AGL said on Tuesday that it has agreed to buy nearly half the output of the proposed 288 megawatt (MW) Palmer wind project – located about 70 kms east of Adelaide – which is owned by Tilt Renewables, which is in turn owned 20 per cent by AGL.

The long term PPA is sure to provide the impetus for Tilt to reach a final investment decision (FID) for Palmer, which is also one of the winners of the federal government’s first generation auction under the Capacity Investment Scheme.

Tilt said it expects to make a call on FID “in coming months” after working through other approvals and construction contracts. It expects it to begin producing power in December, 2028.

Tilt CEO Anthony Fowler Anthony Fowler says the PPA with AGL provides revenue certainty for the project, and says the project will facilitate more than 200 new jobs in construction and five permanent jobs, and more than $7 million in community benefit funding over the life of the project.

“It’s a big win for South Australia and a significant milestone for Tilt Renewables, which is a leading Australian-owned renewable energy business and the largest owner of operational wind and solar generation in the country,” Fowler said in a statement.

AGL, which last year signed up for another Tilt Renewables project, Rye Park (pictured), says it will take 123 MW of the Palmer project’s capacity, and says the deal will diversify its supply source and support the decarbonisation of its electricity supply, which remains dominated by the Bayswater and Loy Yang A coal generators..

“AGL operates a diverse portfolio of assets to help meet the needs of our customers,” said AGL chief commercial officer, David Moretto.

“This renewable energy PPA will add important diversification within AGL’s energy portfolio, support the decarbonisation of the company’s electricity supply, and can help AGL support its customers to decarbonise by increasing the renewable energy linked supply within our portfolio.”

The Australian wind industry has been hit by increased costs – particularly in civil construction works – and reports that wind farm developers have been looking for PPA prices of around $110/MWh or more.

That is double the price secured for projects such as Stockyard Hill in Victoria years ago, and energy analysts say the price is now being beaten by solar and battery storage hybrids, which are enjoying significant cost reductions.

The Palmer project has had a long and chequered history. It was first proposed in 2014 as a project with more than 100 turbines, and faced opposition and court action from locals. It has since been pared back to 40 turbines and won final planning approval from the state government earlier this year.

AGL has also gained new approvals for another South Australian wind project it initially bought in 2009, but then sidelined in favour of coal.

The original Barn Hill project had approval for 62 turbines and around 150 MW in capacity, whereas the new design will have up to 50 larger turbines with a vastly increased capacity of up to 360 MW, as well as a big battery sized at up to 270 MW and 1080 MWh.

AGL is also co-developing the Pottinger renewable energy hub in the south-west of NSW, which has grid rights for 831 MW of wind and a 400 MW, 1,600 MWh battery. It has obtained federal approvals and a final investment decision is expected in 2026.

More information:https://reneweconomy.com.au/australias-wind-energy-drought-set-to-be-broken-as-agl-signs-15-year-contract-with-south-australia-project/