ABOUT INFIGEN (ASX: IFN)
Infigen is a leading ASX listed energy market participant delivering energy solutions to Australian businesses and large retailers. Infigen supplies clean energy from a combination of renewable energy generation and firming solutions available from the broader energy market to Australian business customers. Infigen assets are located across New South Wales, South Australia and Western Australia.
|1.||Alinta Wind Farm, 89.1MW|
|2.||Bodangora Wind Farm, 113.2MW
|3.||Capital Wind Farm, 140.7MW|
|4.||Capital East Solar Farm, 0.1MW|
|5.||Lake Bonney Battery, 25 MW / 52 MWh
|6.||Lake Bonney 1, Wind Farm 80.5MW|
|7.||Lake Bonney 2, Wind Farm 159.0MW|
|8.||Lake Bonney 3, Wind Farm 39.0MW|
|9.||Woodlawn Wind Farm, 48.3MW|
CHAIRMAN AND MANAGING DIRECTOR’S REPORT SUMMARY
In FY18, Infigen reported earnings of $45.7 million from current operating assets reflecting higher generated production (1,549 GWh) and the benefits of the Multi-Channel Route to Market strategy returning improved electricity prices. Net revenue was $210.1 million, underlying EBITDA was $149.1 million and reported free cash flow generated was $97.8 million.
During the year we executed a $605 million syndicated facility agreement and paid down corporate debt by $138 million. The new Corporate Facility is an important step in giving Infigen the capital structure to pursue our strategy while at the same time creating flexibility for the Boards to consider reintroducing sustainable distributions to security holders in the future.
An integral aspect of becoming an active energy market participant is the delivery of a range of products and solutions to Commercial and Industrial (C&I) Customers and energy retailers through the Multi-Channel Route to Market strategy. Through this strategy we sell our generation through a number of channels: purchase power agreements to third parties such as energy retailers; medium to long term contracts with C&I energy users; and spot sales in the energy market.
In FY18 we saw the benefit of this sales strategy: in South Australia, for example, Infigen’s reduced exposure to the spot market as a result of C&I contracting, meant that the average price received from electricity sales in FY18 was largely in line with FY17 despite a decline in wholesale electricity prices in the South Australian market.
Lake Bonney Battery
On 15 August 2018 Infigen announced it had entered into an agreement for the construction of a 25MW/52MWh Battery Energy Storage System (BESS) in South Australia, using Tesla powerpack technology. The battery will be located adjacent to Infigen’s 278.5 MW Lake Bonney Wind Farm. Construction is expected to be complete by May 2019.
The battery will provide firming for Infigen’s South Australian portfolio, and this access to energy storage allows Infigen to enter into additional energy supply contracts with C&I customers. There are further benefits from greater system security for the National Electricity Market and increased battery energy storage capability in the South Australian market.
It is expected that the battery will support firming of at least an additional 18 MW of energy for commercial and industrial customers, depending on their load profile.
Growth in generation – Bodangora Wind Farm
On 6 August 2018 Infigen’s Bodangora Wind Farm in Wellington, NSW, delivered its first export of energy generated to the NEM. Once fully completed the wind farm will feature 33 turbines. Depending on the wind speed, each turbine can generate up to 3.4 MW of power, providing in total enough output to supply electricity to 49,000 homes each year.
When fully commissioned the 113.2 MW Bodangora Wind Farm will increase Infigen’s installed capacity by 20% and expected annual production by 24%. This is a significant milestone for Infigen, and for the local community, and Infigen is grateful for the hard work and support of all parties involved.
The year ahead
Infigen’s growth focus for FY2019 will be on the following projects:
- Bodangora Wind Farm delivered on budget with the Energy Australia power purchase agreement on track for commencing 1H FY19
- Entry into the Victorian market underpinned by the Kiata Wind Farm power purchase agreement
- Potential development of Cherry Tree Wind Farm
- BESS construction with expected first operations in 2H FY19
- Additional physical firming options being evaluated for key markets
- Flyers Creek Wind Farm next prospective development under consideration
As you can see we’ve had another year of solid progress as we transform Infigen to an active energy market participant. We look forward to keeping you updated on our progress and hope to see many of you at the Annual General Meeting on Friday, 16 November 2018.
Chief Executive Officer / Managing Director