Hi Ash You make an important point. I note a few relevant items in the presentation that could make this resource more valuable to a renewable power generator than a standalone user like Visy. I believe the utilization is only half the story and significant benefit comes without even turning the turbines on.
This facility allows Infigen to contract more C&I low cost energy sales which better leverages the higher profit on those resources. (page 9) They can go to contract value up to 75% of total generation. Current market opportunity in NSW is big.(page 10)
The cost of firming reduces significantly compared to current financial firming options. (page 11)
The facility provide a certain and controllable source of firming in NSW .(page 11) This has regulatory benefits by providing compliance with the Retailer Reliability Obligation as of 1 July.
Coal generation for base load will continue to reduce as the business case for new plant is poor. This will increase the relative value of the plant for fast-start electricity provision. (page 6)
They do not intend to need it actually generating that much. "Smithfield capacity utilisation anticipated at2-8%, ensuring a continuing small carbonfootprint." (page 14)
This broaden's Infigen source base to align it more closely as an holistic energy supplier with a portfolio of generation capacity. This also leverages their control and distribution resources as well. (page 5)
The assumptions on page 8 are reasonable IMHO so there seems to be a strong benefit over the longer term and has allowed the confidence to suggest a dividend is possible.
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