A truce is underway to try to resolve a multi-million-dollar dispute between a developer and a Vestas-backed EPC joint venture over a ‘world first’ wind-solar-storage project that turned sour.
The first stage of the Kennedy Energy Park (KEP) in Queensland Australia, which was originally due online at the end of 2018, is planned as the initial phase of a 1.2GW mega-plant that would be among the Southern Hemisphere’s largest renewable energy projects.
KEP – originally billed as a world-first combination of 43MW of Vestas 3.6MW turbines, 15MW of solar and a 2MW/4MWh Tesla battery – was built last year but remains short of full operations, following what co-developer Windlab alleges is the failure of its EPC contractor to deliver a grid-compliant connection.
A prolonged contractual dispute between project company KEP, a partnership of Windlab and Japan’s Eurus, and its EPC – a joint venture between Danish wind giant Vestas and US contractor Quanta – ended up in an arbitration process run by Queensland. That resulted in the developers being told to pay around A$7.5m ($5m) in withheld milestone payments, variation claims and delay costs, with a further A$19.6m of the contractor’s claim denied.
Windlab – which said at the time of the adjudication that the ruling was “interim”, not necessarily enforceable and could be subject to legal proceedings – this week issued a statement to the Australian Stock Exchange flagging the four-week “standstill period”.
It said all parties had agreed to use the time to seek an “overall commercial resolution” and visibility on the operation of the project.
Vestas told Recharge: “Vestas can confirm Kennedy Energy Park is operating at reduced capacity due to challenges from changing grid requirements. Together with our project partners, we are working on solving these challenges to ensure Kennedy Energy Park gets fully operational, delivering much needed sustainable energy to the Australian grid.”
Local reports in Australia suggest KEP is one of a number of projects to have hit problems with grid compliance under new regulations imposed by the Australian network operator.
KEP was built as one of the first wave of global hybrid projects combining wind, solar and battery storage to obtain maximum ‘near-baseload’ potential from renewable generation.