Wind farms seek NSW government financial support

• Several Australian wind projects are seeking state-level funding after the federal government rejected requests to increase financial support for struggling renewable energy developments.
• The shift to state schemes may impact consumer power bills, as the NSW programme recoups costs directly through electricity charges rather than federal tax revenue.
• Rising construction costs and high interest rates have prevented multiple mega-scale wind projects from reaching financial close and beginning construction.

Multiple large-scale wind projects holding federal contracts are seeking alternative funding from the NSW government's Electricity Infrastructure Roadmap after Federal Energy Minister Chris Bowen rejected appeals for increased national underwriting.

The proposed wind farms have been unable to start construction due to rising costs, interest rates, and a lack of long-term power buyers.

"Our problem is not ambition – the problem is economics, and it is getting worse, not better," said Origin Energy (ASX:ORG) CEO Frank Calabria.

The secondary details reveal that four developers under the federal Capacity Investment Scheme have notified officials of project delays, while three specific NSW projects have already negotiated separate deals to cover up to $300 million in debt costs if local transmission infrastructure is delayed.

Following the announcement, the Origin Energy share price was unchanged at $9.82.

The broader state strategy relies on these specific wind developments to connect to the grid before NSW can safely retire its largest coal-fired power station, Eraring, near Newcastle by the end of the decade.

The federal government previously expanded its underwriting pool to help hit a national target of 82% renewable energy by 2030, but recent cost escalations have forced developers to seek additional concessional loans from state financing vehicles.