Trustpower downgraded its assessment of the potential production from the second stage of its Snowtown wind farm in South Australia by 9.4 per cent, reducing operating earnings by around A$8.5 million ($9.3 million) a year "in a year of average wind" and cutting its valuation by as much as A$70 million.
The Tauranga-based electricity producer, which is controlled by Infratil, said in a statement "the revision is due to a number of factors associated with energy yield prediction", including "the limitations with industry modelling tools when applied to a site of this complexity and scale, using modern large rotor turbines".
Trustpower's shares fell 1.9 per cent to a four-week low of $7.60. Infratil stock declined 0.6 per cent to $3.15. Snowtown is the second-largest wind generation facility in Australia with total installed capacity of 370 Megawatts, according to the Trustpower website. It was built in two phases, 2008 and 2013, at a total cost of around A$660 million. The output reassessment relates to the stage two development. The reassessment reduces expected annual generation from 985GWh per year from the stage two development to 892GWh.
"Trustpower expects that lower wind production at Snowtown Stage 2 would reduce 2017 financial year earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments by approximately A$8.5 million in a year of average wind," chief executive Vince Hawksworth said.
"Trustpower also expects a reduction in the valuation of the Snowtown Stage 2 generation assets of between A$60 million to A$70 million", applied against the group's revaluation reserves.
