Windlab, Kennedy EPC contractor extend stand-still agreement

Windlab Ltd (ASX:WND) today announced an extension of the term of the stand-still agreement it struck with the firm contracted to build the much-delayed Kennedy Energy Park (KEP) in Queensland.

The idea of the agreement, first announced in February, was to give the parties time to settle their ongoing dispute outside of court. The period of the agreement has now been extended until May 29.

The Kennedy complex combines 43.2 MW of wind, 15 MW of solar and 2 MW/4 MWh of Tesla battery storage capacity. It is a 50/50 JV between Windlab and Eurus Energy Holdings Corp of Japan. Construction of the renewable energy park has been completed, but it has been unable to reach full operation because has not demonstrated compliance with generator performance standards of the Australian Energy Market Operator (AEMO).

Several months ago Windlab blamed the engineering, procurement and construction (EPC) contractor, a joint venture (JV) between Vestas Wind Systems A/S (CPH:VWS) and Quanta Services Inc (NYSE:PWR), for the significant delay of the Kennedy Energy Park (KEP) project. The contractor, meanwhile, sought milestone and other payments from the project company.

“Kennedy and the EPC Contractor continue to work diligently with AEMO and Ergon to complete the project’s registration as a generator, particularly in relation to modelling to demonstrate compliance with the project’s generator performance standards (GPS). Once registered Kennedy will immediately commence testing and progress towards commercial operation,” Windlab said.

The park will sell to CS Energy, a Queensland government-owned corporation, its electricity and large-scale generation certificates (LGCs) under a 10-year power purchase agreement (PPA) struck in 2017. The sunset date of this deal has now been extended to end-December 2020, Windlab added in today’s press release.

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