The company said it had taken a portfolio view to the investment decision given the highly contracted revenue base it already has, and the demand for power in the market following the closure of the Hazelwood power station in Victoria earlier this year and a number of other market factors including the fact that forward wholesale electricity prices have risen considerably which support revenue projections in the early years of the project.

 

Salt Creek is expected to produce 172GWh per annum on average once fully commissioned, sufficient to power around 30,000 homes.

 

The project is expected to take 12 months to construct and will provide in excess of 100 jobs during the construction period.

 

It has contracts with Zenviron for the development and Vestas for the 15 3.6MW turbines, and will fund the development from its existing bank facilities.

 

As construction begins the company will start looking for power contracts.

 

"We believe the project has good investment fundamentals, supported by proven technology and construction partners and robust long term operations and maintenance arrangements and as such represents an attractive project to contribute to Australia's Renewable Energy Target," the company said.

 

With the company well diversified geographically and across utility scale wind and solar opportunities, Tilt said it was continuing to review its project pipeline, but it would also extend its offering to storage technologies and firming capability to address generation intermittency. 

 

The company was last week forced to admit that wind conditions in June were lower than expected, particularly well below average wind speeds in South Australia for the month of June, have resulted in significantly lower production compared to management expectations.

 

The result is the lowest month of production since 2014.

 

Production across its Snowtown 1 and 2 assets in April and May was also below expectations. 

 

The company said the business would expect to experience a below average quarter of this magnitude to occur every three to four years.

 

The New Zealand portfolio has also been impacted by unseasonably low wind speeds with production from these assets anticipated to be 18% below expectations for the June quarter.

 

As a result, June quarter production across the Tilt group will be 30% below expectation.