Pension fund invests in Octopus-developed 1.5GW clean energy park to replace Australian coal plant

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Australian superannuation (pension) fund Hostplus will invest in a joint venture between Octopus Australia and the national Clean Energy Finance Corporation to build a 3,000-hectare, 1.5GW renewable energy park.

The Gippsland Renewable Energy Park (GREP) will provide clean energy to the grid to help replace the power currently delivered by the 1,450MW Yallourn coal power station which will close by 2028.

GREP will investigate the deployment of various technologies at utility scale, including solar, wind, battery storage and also the potential of green hydrogen. A government document says that the GREP project will provide 1.5GW of power though no source is specific on the generation mix or the expected energy storage capacity.

It is is set to start construction in 2024 with completion in 2026, according to its website and sits within the Gippsland Renewable Energy Zone (REZ), one of six in the state of Victoria.

Hostplus will invest via an Octopus Australia-managed platform to help develop GREP, while Octopus itself is investing too with the Clean Energy Finance Corporation (CEFC) providing AU$8.5 million (US$6.2 million). Octopus Australia is part of the investment firm Octopus Group which owns UK-based group Octopus Energy, while the CEFC is an Australian government body.

CEFC CEO Ian Learmonth said: “Gippsland has been a powerhouse for the National Electricity Market (NEM) for many years. This development will contribute to the region’s transition to a clean energy future, while continuing to supply the power that helps keep Australia’s lights on.”

The project is one of several at different stages of development in the Gippsland REZ, including the Perry Bridge Solar and Fulham Solar projects which are also being developed by the joint venture between Octopus Australia and the CEFC. The JV bought the projects from developer Solis Re when it was formed in July 2021, and they are sometimes referred to as part of GREP and sometimes as separate entities.

Others in the Gippsland REZ include the Delburn Wind Farm, Star of the South offshore wind farm, Marinus Link, Morwell Solar Farm, Frasers Lane Solar Farm Ramahyuck Solar and Maffra Solar. Large BESS have been proposed for Jeeralang gas power station (EA), Morwell Solar and AGL Loy Yang.

On top of that, investor-owned utility EnergyAustralia, which runs the Yallourn plant, says it will build a 350MW/1400MWh utility-scale battery energy storage system (BESS) near the plant. Its peer Origin Energy has also called for suitably qualified firms to install an even larger, 700MW BESS near its 2,880MW coal plant in Eraring.

Origin has said that coal is no longer able to compete economically with renewable energy and storage in the NEM and brought forward the planned retirement of its Eraring plant by seven years to 2025 from an originally announced 2032 date.

Coal plants are also expensive to run. Yallourn costs EnergyAustralia more than AU$200 million a year in Opex, while Eraring costs about half that.

However, Australia’s federal government still seems reluctant to commit to a coal phase-out despite belatedly introducing a net zero by 2050 policy target. Non-profit group Environment Victoria has highlighted that coal is the biggest single cause of climate and air pollution in Australia. The group’s CEO Jono La Nauze said last year that all of the remaining 20 or so coal plants in the country should be closed down by 2030, stating that Australians should not “leave such an important task to the market to decide”.

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