Iberdrola, Spanish energy giant, inks deal with Partners Group, OPTrust. Together, they will take 100% ownership of the Ararat wind farm in Victoria, Australia. For Iberdrola, the acquisition is a strategic move to expand its renewable energy business in the Australian market. This initiative is key to advancing the country’s ambitious clean energy goals. The Ararat wind farm, with an installed capacity of 242 megawatts (MW), is the largest operating wind farm in Victoria and has been generating power since 2017. It mainly markets its electricity via Power Purchase Agreements (PPAs).
Iberdrola is deeply committed to investing in renewable energy sources. They intend to localize at least €58 billion of that amount. Eighty-five percent of this additional investment will be targeted at countries with an A credit rating. This approach ensures a consistent and reliable regulatory environment. The rising electricity prices in Victoria are being driven by the increasing appetite for renewable energy. As such, the Ararat wind farm is ideally positioned to benefit from upcoming transmission upgrades, including the proposed Western Renewable Link and Project Energy Connect.
Commitment to Renewable Growth
Iberdrola’s acquisition of the Ararat wind farm is a clear indication of its strategy to enhance its renewable energy footprint in Australia. The company aims to support the Victorian state government’s goal of sourcing 95% of its energy from renewable sources by 2035. This purchase further diversifies Iberdrola’s vast portfolio and contributes to Australia’s larger goals for electrification and decarbonization.
In addition, Iberdrola has captured headlines with its expansion efforts. The Clean Energy company recently purchased the Tungkillo Battery Energy Storage System (BESS) and entered a joint venture in development of the Victorian side of the Victoria-New South Wales Interconnector. Additionally, in September, Iberdrola announced that it would buy another 30.29% stake in Neoenergia, a Brazilian energy distributor, thereby further consolidating its position there. These projects are indicative of Iberdrola’s strategic charge to diversify its energy asset base and strengthen its position in renewable markets.
Strategic Investments and Market Position
The investment strategy of parent Iberdrola heavily focuses on areas with predictable regulatory climates and investment grade credit ratings. The company has dedicated a significant portion of its capital dollars to invest in foreign markets. This consists of €20 billion for the UK, €16 billion for the United States and €9 billion for the Iberian Peninsula, to name a few. Iberdrola’s move is a clear and strategic play to reinforce this company’s commitment to growth. The company then focuses on countries that can meet the parameters of their sustainability mission.
The transaction for the Ararat wind farm is still subject to customary closing conditions. Once complete, it will further cement Iberdrola’s position as the world’s largest renewable energy company. This impact will be felt both at home in Australia and around the world.