AGL Energy has signed an agreement with New Zealand renewable energy company Meridian Energy to build the largest wind farm in the southern hemisphere at Macarthur in Victoria's southwest.
The $1 billion 420 MW wind farm will be located near Hamilton, 260km west of Melbourne and is due for completion in early 2013, AGL said.
It will have the capacity to power more than 220,000 average Victorian homes and abate more than 1.7 million tonnes of greenhouse gases each year, the equivalent of taking more than 420,000 cars off the road, the company said.
AGL and Meridian will each fund 50 per cent of the capital cost of constructing the wind farm, to feature 140 Vestas V112-3.0 MW wind turbine generators, which will be constructed by a Vestas/Leighton Contractors consortium.
AGL's share of the total cost, plus costs associated with construction of a substation at Tarrone, will be funded from existing balance sheet capacity, the company said.
AGL will also receive all of the wind farm's energy output and renewable energy certificates.
AGL chief executive Michael Fraser said the joint venture project would deliver significant benefits for both renewable energy developers.
"As a result of utilising Vestas' new 3.0 MW V112 turbines, we have been able to increase the capacity of the wind farm, while reducing the number of towers from 174 to 140," he said.
"This reduces the environmental footprint of the project and achieves substantial operating cost savings in excess of $30 million over the life of the wind farm."
AGL said about 400 direct jobs and 800 indirect jobs would be generated during construction.
The wind farm would employ 30 full-time staff for 25 years, following construction.
Leighton Contractors was awarded a $290 million contract for engineering, procurement and construction work, the company said.
The scope of works includes the Macarthur Wind Farm 33/132kV sub-station, Tarrone 132/500kV terminal sub-station, 12km of 132kV overhead transmission line to the Tarrone terminal sub-station, 33kV underground cable collector systems, sub-station SCADA interface, as well as international shipping, local transportation and the mechanical erection of the 85 metre towers, machine heads and blades.
Leighton Contractors managing director Peter McMorrow said the project was a vital piece of infrastructure for the renewable energy industry and the wider community.
"Our priority will be to deliver a quality project on time, while ensuring our teams meet world-class safety standards," he said.
Leighton had previously worked with Vestas to construct the Lake Bonney Wind Farm in South Australia, the company said.
AGL is a partner with Better Place and Macquarie Capital in raising $1 billion to deploy an electric vehicle (EV) charging network in Australia powered by renewable energy.