HOTSPOTTING: Terry Ryder | January 29, 2009

Article from: The Australian
A great article about the Warrnambool and the south west I discovered on the web written by Terry Ryder.

TWO things are clear about the Kevin Rudd agenda: he believes spending on infrastructure can keep the economy reasonably healthy and he wants action on climate change.

A question property investors might ponder is this: where in Australia is the best place for the meeting of those two ideas? The surprising answer, I would suggest, is the southwest of Victoria.

One of the biggest items on the list of priority infrastructure is energy generation. And better ways to generate energy is also fundamental to counteracting global warming.

There’s more action on alternative means of power generation happening in Victoria’s southwest than anywhere else in Australia. That means economic activity and jobs creation. And that translates into demand for real estate.

When I consider all the impacts and possibilities from this, all roads lead to Warrnambool. This is a regional centre that’s pretty sturdy even without the boost from major projects: it has a strategic location, a population above 30,000, a diverse economy and is projected to continue growing steadily over the next 20 years.

Warrnambool is on the ocean between the Hopkins River and the Merri River, and at the junction of three major highways: the Princes Highway, the Hopkins Highway and the Great Ocean Road. It’s the principal service centre for southwestern Victoria, the capital of the Great South Coast, Victoria’s fifth largest city, and a popular tourism and retirement destination about three hours by road from Melbourne. There are daily rail links to the state capital.

The Department of Sustainability and Environment describes Warrnambool as the only centre in western Victoria with significant population growth (currently 1.7 per cent) and expects it to continue growing, with its attractiveness to young adults for education and job opportunities. The state Government projects the population to rise from 31,000 in 2006 to 36,000 in 2016 and 42,000 in 2031.

Warrnambool has been included among the top 25 most liveable locations in Australia by My Business magazine because ofits seaside situation, suitability for families and diverse job opportunities. Major industries include retail, tourism, education, health, dairy, meat processing and construction.

Education centres include a Deakin University campus, the South West Institute of TAFE, and South West Victoria SEAL. The South West Healthcare facility will be the largest hospital in regional Victoria following a $175million upgrade under way.

Warrnambool is rated one of the top 10 regional tourism destinations in Victoria and earns $160 million from tourism in a typical year — based on its seaside location, moderate climate, wildlife reserves, volcanic lakes and the annual spectacle provided by southern right whales.

It’s also an important manufacturing and distribution centre, known for its rugs and blankets. Other industries are milk-processing and dairy product plants (including one of Australia’s largest), a wool mill that dates from 1874 and the Fletcher Jones clothing firm.

The town has a busy residential market, with about 500 house sales in the year to September at a median price of $275,000. It has averaged 10 per cent annual price growth over the past decade.

The district includes Port Fairy, a historic town where the Moyne River meets the ocean about 30km west of Warrnambool, and Portland, an industrial port town about 60km further west. Evidence of its growth is seen in plans for a new suburb of 1600 homes with a primary school, shopping centre and sports grounds north of the city centre.

But the big kicker is its potential as a centre for energy generation, particularly via alternatives to the coal-based power stations in the Latrobe Valley east of Melbourne. Projects in planning include two gas-fired power stations, nine wind farms (in addition to the two already operating) and proposals for geothermal energy plants.

Santos has announced plans for an $800 million power station at Orford, while Origin Energy is proceeding with a $1.5 billion two-stage facility at nearby Mortlake. Santos says a final investment decision will be made by the end the year that would enable power generation by 2012. The project will create 730 jobs during construction and can be expanded to create a 1,500 megawatt power station in the future.

Spanish wind power company Union Fenosa has announced plans to build five wind farms in western Victoria at a cost of $1.9billion. The first two will be a 68-turbine facility at Ryan Corner and a project with 31 turbines at Hawkesdale, both in Moyne Shire, which adjoins Warrnambool City. Others will follow at Tarrone, Berrybank and Darlington.

AGL Energy is planning the Oaklands Hill wind farm near Glenthompson, north of Warrnambool. AGL is also involved in construction of Australia’s largest wind farm at Macarthur, about 50km north of Port Fairy. The $850 million project will cover 5500ha with 150 turbines. The project is expected to generate enough electricity to power a city the size of Geelong, with first energy to begin feeding into the grid by 2011.

Victoria’s first commercial geothermal pilot plant is planned for Koroit, just outside Warrnambool. Hot Rock is planning a $7 million geothermal test well (hopefully with a grant from the federal Government’s $50 million “hot rocks” fund), which would be followed by a 1MW pilot plant to be operational by the end of 2009. Next would be a 50MW plant within two years. When the new power stations and wind farms reach full potential, they will produce electricity for about 4million homes.

The Warrnambool district also has become a target area for resources exploration. Copper, nickel, zinc and silver have been found in a 300sqkm area north of Warrnambool. The coastal region near Port Campbell has supplies of natural gas and another area near Portland has been identified as potentially Australia’s next major oil and gas supplier.

Prospects for Portland were boosted in August last year with state government approval of a $45 million expansion of its port. This allows the port’s woodchip storage facility to be extended, to cater for the first harvestings of 130,000ha of blue gum forests this year. The decision reportedly paves the way for 1130 new jobs in the Portland region.