February 24 (Renewables Now) - Windlab Ltd (ASX:WND), the developer of the Kennedy Energy Park (KEP) in Queensland, expects to book up to AUD 20 million (USD 13.2m/EUR 12.2m) in non-cash impairments for 2019 caused by the huge delay in the commissioning of the wind-solar-storage complex.
The impairments are seen to range between AUD 10 million and AUD 20 million, Windlab said in a bourse filing on Monday. The final amount will be clear after it completes a review of the carrying value of Windlab’s investments in joint ventures (JVs) related to the particular project. The developer noted that forecast movements in future wholesale electricity prices and other aspects of the project’s valuation model are also taken into account in the write-down estimate.
The hybrid power scheme is running 13 months behind schedule due to failures to secure approvals for its generator performance standard (GPS). Earlier this month, Windlab and the engineering, procurement and construction (EPC) contractor, which is a JV between Vestas Wind Systems A/S (CPH:VWS) and Quanta Services Inc (NYSE:PWR), reached a four-week stand-still agreement in a legal battle that concerns costs caused by the project’s delay. The parties sued each other and Windlab insists that the EPC contractor has to cover the project delay costs.
The Queensland Building Industry Fairness in January ordered Windlab to pay the contractor roughly AUD 7.5 million in milestone payments, variation claims and delay costs. Following the adjudication, the parties agreed to hold off from further legal proceedings with the hope of finding a resolution outside of court.
“While Windlab remains confident of Kennedy’s position in relation to the dispute, including its right to receive delay liquidated damages, the short-term outcomes and path to ultimate resolution are uncertain and material to any current appraisal of the value of Windlab’s investment in Kennedy,” Windlab said in its latest statement.
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.
(AUD 1.0 = USD 0.660/EUR 0.609)