Origin Energy to Purchase Yanco Delta Wind Farm

Origin Energy, one of Australia’s largest energy companies, has agreed to acquire the 1.5-gigawatt Yanco Delta wind farm from Virya Energy as part of its strategy to expand its renewable energy and storage in its portfolio.

Yanco Delta is one of NSW’s most advanced wind and energy storage projects. The estimated $4 billion (US$2.6 billion) project is expected to power more than 750,000 households and reduce up to 4.5 million tonnes of emissions produced annually by displacing coal generation.

Yanco Delta is located in the NSW Government-designated South West Renewable Energy Zone (REZ), strategically near a key transmission infrastructure. With 208 wind turbines and an 800 Megawatt Hours (MWh) battery planned, the wind farm development will commence on a 33,000-hectare site 10 kilometres northwest of Jerilderie in the Riverina district. The project was approved by the NSW Government in December 2023 and under the Environment Protection and Biodiversity Conservation (EPBC) Act in February 2024.

Origin CEO Frank Calabria describes the wind development project as “large-scale, advanced, and therefore highly strategic.” With the key planning, regulatory approvals, and infrastructure and transmission plans in place, the company considers the acquisition a milestone in its transition into cleaner energy, allowing it to bring a substantial amount of renewable energy supply into the market quickly and help meet the demands of its consumers.

This project will also help fill the gap left by the closure of the Liddell power station, the country’s largest and oldest coal-fired power plant.

As part of the agreement, Origin Energy will make an upfront payment of $125 million to Virya Energy and an additional variable payment of up to $175 million “conditional on the project achieving certain development milestones.”

Origin will utilise its corporate debt facilities to pay the purchase price and development expenditure before the completion of the project. In addition, the company will explore a range of capital-efficient options, including partnerships with capital providers, to finance the construction of the project.

“Yanco Delta is a quality wind resource that provides benefits of scale. We look forward to working closely with the local community and other stakeholders and bringing Origin’s expertise and track record in developing large scale energy projects to progress this project to construction,” Calabria said.

Origin’s portfolio of renewable and storage projects includes the pending construction of a 300-MW battery at the Mortlake Power Station in southwest Victoria, approved last January, and the acquisition of Walcha Energy, together with its proposed Salisbury Solar Farm and Ruby Hills Wind Farm projects last February, which have a planned capacity of more than 1,300 MW. The company also acquired the Warrane property in July 2023 to establish the 500-MW greenfield development project known as the Northern Tablelands Wind Farm.

The NSW government is yet to announce whether it will mandate Origin to keep the company’s Eraring coal-fired power station open beyond its scheduled closure in 2025.

Think tank Climate Energy Finance, however, said that extending the operations of the Eraring station beyond 2025 would cost NSW residents $120 million to $125 million per year.

“This is very, very expensive ‘insurance’ for a non-existent reliability gap. It is also completely unconscionable in light of the fact that NSW electricity consumers are already funding Origin to the tune of around half a billion dollars in coal subsidies over 2023 and 2024,” CEF director Tim Buckley said.