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Clean Power Port Augusta Coal-Fired Power Station

Published on May 3rd, 2012 | by James Martin II

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The State of Commercial Solar Power in Australia



 

Commercial-scale and utility-scale solar power are viewed as the next frontier for the solar industry in Australia. The incentives that drove the wild boom in residential solar power — state-run feed-in tariffs coupled with federal up-front discounts in the form of renewable energy certificate — have mostly died down, and at present, the home solar market has reached a fragile sort of equilibrium. As has been widely noted, the cost of solar PV has plummeted in the past several years. This is a game-changing fact for solar power and for the future of electricity generation.

There are a number of large-scale projects in the pipeline, including the Solar Flagships projects — the proposed but beleaguered Moree Solar Farm and the Solar Dawn consortium’s CSP plant in Chinchilla, Queensland. Both of these are now on shaky ground, due to the withdrawal of a key partner and failure to secure a PPA in the case of the former, as well as a change of government from Labour to Liberal in Queensland that promises to see a withdrawal of funding in the case of the latter.

But there are a number of other large-scale projects and incentives going forward. For example, there are high hopes for the ACT’s large-scale feed-in tariff — which received a whopping 49 submissions in its opening round — to show the rest of the nation how it’s done. The winners are expected to be selected within the year. Meanwhile, Western Australia’s 10MW Greenough River Solar Farm carries on, and a renewable energy think-tank has even recently pitched a well-argued proposal for replacing 2 ageing coal-fired power plants in Port Augusta, South Australia with concentrating solar power.

In addition to these high-profile projects, there are also numerous other medium (~100kW) to large-scale project in the works or already operational throughout the country, including the Nullagine and Marble Bar solar plants in remote Western Australia, and the University of Queensland solar array — currently Australia’s largest rooftop array. Solar PV and solar thermal combined, however, still made up less than 2.5% of Australia’s electricity generation in 2011, according to the Clean Energy Council’s Clean Energy Australia 2011 (pdf) report. 90.36% of all generation came from fossil fuels — mostly coal.

If we wanted to use a metaphor, one could liken Australia’s utility-scale solar power industry to chicks in an incubator who are just beginning to break out of their eggs. To take this awkward metaphor further, more eggs could potentially be on the way, but only if the first few reach a stage of development advanced enough to move out of the incubator to make room for them, and to give their rearers some confidence in their own ability to bring birds into the world. If this happens, Australia could start to see its large-scale solar industry reach its full potential, and, well, take flight to become a large chunk of the country’s generation portfolio.

Australian Politicians Refuse to Acknowledge the Potential of Commercial Solar Power (and Solar PV in General)

This sort of success will be predicated on a number of factors, and many feel that what is really needed right now is a number of projects that demonstrate the technical and financial viability of these projects for Australia. Coal-fired generation technology is well-understood and widely deployed here, and is therefore associated with a low level of risk; from an investor’s point of view, it is a known quantity and therefore seen as bankable technology (at least for now).

This is not yet the case for utility-scale or commercial solar power in Australia, especially after all the turbulence surrounding incentive schemes for the industry. To make matters worse, many Australian politicians still have their heads in the sand with regard to renewable energy, despite ample evidence that renewable technologies can deliver. Shining example and case-in-point is Germany, whose renewable capacity is not only reliably producing a good chunk of the country’s overall generation, but is even starting to show signs of its growing ability to drive down electricity prices, thanks to the merit order effect. It goes without saying that expansive, sunny Australia’s solar power potential easily dwarfs that of smaller, colder Germany. So what’s going on?

Once some larger products are on the ground and proving themselves, more will likely be quick to follow suit, especially with the price of solar technology dropping steadily. As Australian solar industry analyst and veteran Nigel Morris of Solar Business Services wrote recently about solar PV: “Those on the inside of the PV industry can smell economic parity; we can see it and taste it in many parts of the world, including Australia’s retail market and we know how fast it is going to accelerate. It won’t come without bumps and wobbles and it isn’t a silver bullet. But it is grossly underestimated and with their own confirmation bias I suspect the deniers are failing to open up to what’s really going on around them.”

Morris says that the 3 ‘golden rules’ required for large-scale solar project developers to get projects on the ground are: 1) knowing the market, 2) getting engineering and business advice, and 3) understanding finance. Making specific reference to Solar Choice’s Operational Lease package for financing big projects, he notes that this last point is integral for ‘staying in the game’.

Do what they may, however, commercial solar power project developers, at least for the time being (or until 2020), will need some kind of government support to reach the price-points that will make their projects economically worthwhile. Germany and Spain, as the world’s loss-leaders for solar, have already done much of the heavy lifting in helping to drive the price of solar technologies down to their current historically low levels. The rest of the world can now stand on their shoulders.

Having commented and advised extensively on the state of the utility/commercial solar industry here, Morris recently wrote an eloquently worded open letter to some high-profile government leaders on the topic (copied in below).

Dear respected leaders,

I would like to bring your urgent attention to the report by McKinsey & Company titled “Solar Power, Darkest before Dawn”. McKinsey are one of the most respected consultancies in the world and are noted for their conservatism. The findings in this report highlight the astounding growth of PV and the crucial role it will play in the world’s energy mix in the near term. They echo the upgraded forecast for solar PV issued recently by the IEA, arguably an even more conservative organisation and those of many others including my own company SolarBusinessServices.

It highlights the fact that solar PV is economic NOW in selected markets and is tantalisingly close to being economic without subsidies in many more.

Quoting the headline statement – “Those who believe the potential of the solar industry has dimmed may be surprised. Companies that take the right steps now can position themselves for a bright future in the coming years”.

If only our elected leaders could take this advice and provide meaningful support.

With minor exceptions, Australian Government policy for solar PV, at all levels, remains meek, dis-jointed and inconsistent.

We see State leaders continuing to use solar PV as a completely unjustified scape goat for rising electricity prices.

We see an enormous focus on protecting the viability of coal-fired generation and the potential of CCS from Federal leaders.

We see lacklustre and un-coordinated policy foresight from opposition, that belies the magnitude of the industry.

And we have an Energy White Paper, the business plan for our energy future that is so wrong with respect to solar PV it virtually ignores it.

I do not deny that we need an energy mix, nor is solar PV a silver bullet. However, I remain perplexed and astonished at the lack of will, fortitude and vision when it comes to the most obvious resource that Australia has.

What is it going to take for our leaders to wake up and embrace this unique opportunity ?

I hope that this report might help convince you that solar PV, even by the most conservative estimates, has a staggering and completely underestimated potential in Australia and I look forward to seeing co-ordinated policy that supports rather than hampers solar PV .

Kind regards,

Nigel Morris

Director

SolarBusinessServices

The Australian solar industry has its fingers crossed that leaders will heed Morris’ words.

Top image: One of Port Augusta, South Australia’s two coal-fired power plants. These plants provide 30% of South Australia’s power. Image via Alinta Energy.

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About the Author

James Martin II has a BA in Philosophy from Bridgewater State College, and a Master's degree in Environmental Management from the University of New South Wales. He has lived in the US, Japan, and Australia. Currently, he lives in NYC doing research and writing about cleantech (mainly solar PV) for a few different websites, including Australian solar brokers Solar Choice.



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  • http://ronaldbrak.blogspot.com.au/ Ronald Brak

    I just found out how much it cost to install point of use solar in Australia last month. Apparently the average cost was around $3.10 US per installed watt. This was before any subsidy and before our 10% Goods and Services Tax. Given sunshine levels in Australia and high retail prices for electricity that are often over 25 US cents per kilowatt-hour, this makes point of use solar the cheapest source of electricity for most Australians.

    • Bob_Wallace

      Based on the $3.10/watt and a average 5 hour solar day the power produced would cost about $0.13/kWh.

      For the first 20 years. After that the electricity is free.

      And during the 20 year payback period the price of electricity would not rise. If grid prices rise 3% per year the retail price of electricity from the grid will increase to over $0.33/kWh.

      • http://ronaldbrak.blogspot.com.au/ Ronald Brak

        Thanks Bob. That’s about the same as my crude, back of the envelope estimate. My figure is a little higher, but that might just be because the cost of capital tends to be higher in Australia than the rest of the developed world.

        • Bob_Wallace

          Here’s what I used to gen the numbers.

          http://www.nrel.gov/analysis/tech_lcoe.html

          I left in the 4% discount rate. If financing is higher where you are then that would drive the price per kWh higher.

          When using the LCOE page remember to take heat rate and fuel cost to zero.
          I do find this way of estimating the cost of electricity a bit incorrect because it does not allow for the years/decades of no-cost electricity which follow the pay off. It’s true that fossil fuel plants are also paid off at some point, but their fuel and maintenance costs continue.

          • http://ronaldbrak.blogspot.com.au/ Ronald Brak

            Thanks for the link. That page gave me a result similar to my rough estimate. which I got by using a simple rule of thumb that allows 10% for capital costs and depreciation: Cost per watt divided by average kilowatt-hours produced per year multiplied by 0.1.

            In US dollars this gives a cost of under 18 cents a kilowatt-hour for most of Australia’s population, about 20 cents for Melbourne, and about 14 cents in desert sunny Cloncurry.

  • RobS

    Any moderators able to see how many of these characters are posting from the same IP address?

  • http://ronaldbrak.blogspot.com.au/ Ronald Brak

    The Port Augusta coal power plants are alredy being shut down. The oldest of the two plants will be closed for good in July, while the other will only be operated during the hottest six months of the year when electricity demand is higher. While South Australia’s expanding solar capacity plays a small part in allowing us to do this, it’s mostly due to our large wind capacity. Last year South Australia got 26% of its electricity from wind. Basically, we are doing away with baseload power in South Australia.

    Solar power fed directly into the grid is going to have a hard time competeing with point of use solar in Australia. This is because in most of Australia wholesale electricity prices will soon be around 5.5 cents a kilowatt-hour, while retail electricity prices are usually over 25 cents a kilowatt-hour. (I was charged 27 US cents a kilowatt-hour on my last electricity bill.) As a result, people can currently save money by putting a solar system on their roofs, but can’t yet make money by building solar farms to feed electricity directly to the grid. This means Australia’s rapid expansion of point of use solar is going to continue and it will push down the wholesale price of electricity during the day, which will make the economics of direct to grid solar power worse. So we are likely to end up with a large amount of solar capacity on the roofs of shopping centres, factories, warehouses, schools, and residential homes but only a limited amount that’s fed directly to the grid.

    • Bob_Wallace

      And what’s wrong with that?

      You solar will be well spread out. That means no need for a bunch of new transmission and a system less impacted by wandering clouds.

      Rooftop owners will be getting a good deal. They will pay less for the power they use.

      Other customers will benefit because the price of peak hour power will drop as rooftop takes away the peak supply portion.

      Utilities, if pricing is done correctly, will be fine because they will have to invest less capital to create new peak hour capacity. They can make their money off distribution and management.

      And all of us will benefit by having coal plants shut down at least part of the time….

    • Zer0Sum

      Am I the only one who has noticed that wind power in Australia only produces an average of 30-40% of it’s peak capacity?

      • Bob_Wallace

        That’s pretty typical of most wind farms. Newer technology, best sites is getting closer to 50% of nameplate.

        No power generation technology gives 100% of nameplate.

      • http://ronaldbrak.blogspot.com.au/ Ronald Brak

        No, I’m sure people actually living in Australia have already noticed that the wind doesn’t blow at a constant rate all the time.

        • Zer0Sum

          The problem is that we only produce 300 MW of wind power. Less than 1% of total electricity consumption… And the wind farms that we have are all placed in the best locations already. Doesn’t look good for the future of wind power in Oz. CSP and distributed PV will have to be embraced as China and fertiliser is a much more lucrative market for coal than burning it up for electricity supply.

          • Bob_Wallace

            Looking at an Australia wind map it seems to me that you’ve got tremendous wind potential.

            http://www.dpi.vic.gov.au/__data/assets/image/0004/34582/SKM-DPI-Renewable-Energy-Part2-v5_img_11.gif

            Furthermore, new turbine design allows for efficient energy harvesting in ‘less than optimal’ wind sites. It’s a matter of fitting the tool to the job.

            Australia has enormous renewable potential. Lots of wind, lots of solar, lots of geothermal, lots of wave….

          • Zer0Sum

            And almost zero political will…

            The coal industry is firmly entrenched and Murdoch controls 90% of mainstream media.

            The Laboural parties are beholden to elite interests and they manipulate the political process with corrupt polling results which continues to block the greens who should actually be in control by now.

            Australia could be the world leader in renewables but has chosen to lag behind, go to war in the Middle East and continue to exploit it’s vast mineral resources instead. Hence we are the per capita largest consumers of fossil fuels in the world by a very large margin.

          • http://ronaldbrak.blogspot.com.au/ Ronald Brak

            Yes, Australia can only build about 1 gig of wind power because Australia is only about one third the size of Denmark.

          • Zer0Sum

            Relying on wind power to solve Australias energy supply issue is ridiculous. It has so many drawbacks when compared with truly low cost and highly efficient CSP.

            The only reason Australia hasn’t embraced CSP already is the threat it represents to the coal industries grip on political power.

            Geothermal can work in a few specific areas but not across the whole country. There are very few places in Australia that couldn’t host a local CSP plant. That means distributed localised energy production, energy security and jobs.

            Wave energy is also possible but it requires massive investments in new technological advancements so unlikely to kick in before the oil runs out.

            Ghawar is now producing 80:20 water:oil output so there isn’t much time left. Probably by the end of this decade.

            Unfortunately the fascists in control are only interested in their own personal bottom line which is firmly propped up by the Elites. there is little chance they will be convinced to make the changes required for the future of all Australians. It looks like it will take a severe disruption to global energy supply to force anything substantial to actually happen over here.

          • Angela Warra

            Hello guys.
            I have requested from Origin Energy legal department a copy of section of liability clauses Solar Generator. Took 5 weeks before a copy was posted out.
            Under Origin heading indemnity & liability of a solar system.
            “All indemnity & liability passed from Origin to owner of solar generator system upon signing”. Even the Federal Government has the same clause word for word under REC.
            Did you not read clause section under ownership and risk, read the fine print.
            You guys must had poor education in law given you didn’t read indemnity & liability
            before signing the contract.

  • RobS

    Wow, maybe we could come up with a new term for the correlation between the growth rate of desperate rambling semi-literate ill informed opponents and the growth rate of renewables.

  • Mike legalman AU

    Remember that you have:
    You agree to purchase the system or systems, which you have selected; you have employed the workers or company to carry out that work on your behalf. You have taking the full legal liability for operating in the case of a solar electricity system, the connection of that system to the electricity grid, as stated below ownership and risk.

    Ownership and Risk

    What dose this mean?
    1. You the owner agreed to take all legal liability for your system (solar grid generator) to the grid.
    2. You take all risk for generating power.
    3. You take responsibility for operating & controlling your system.
    4. You take responsibility for power quality to grid.
    5. You take responsibility for death or injury to persons, lines men’s, or other party arising from your system.
    6. You take responsibility for liability for loss, damage, consequential damage; damage to other property from your system to the grid interconnection network.
    7. You take responsibility for monitoring and data records of your system.

    If you fail to monitor, maintain, control while in operation and record up kept of residential solar generator equipment you are negligent.

    Legal liability:

    Solar generator grid is as following clause

    1. the word liability include loss;
    2. damage;
    3. Death or injury to persons, lines men’s, or other party arising from your system.
    4. Consequential damage
    5. Charge;
    6. Claim cost
    7. Demand;
    8. Expense and legal fees

    Summary:

    Solar panel grid system connected to the grid has a real legal issue for the homeowners connect to the grid. The power company that is the owners of street lines will sue you for damage occurs from grid tied solar system.

  • Bob

    Expert warn of solar power damage to power network.

    http://au.news.yahoo.com/video/national/watch/26923501/

  • electronic engineer

    I first would like to say that solar power can not work, it appear that you fail to understand converting dc to ac power and the effects that grid solar power has on the Australian power networks. As an electronic engineer reproducing the same power that comes from steam driven generator is not the same as solar grid inverter, you fail to under stand the side effects that grid inverter have on the power lines. You cannot regulate the high voltage or control Harmonics nor can you deliver surge current to start appliances, for that you need coal power base load, and I challenge you to try running an grid inverter directly of your solar array to power your home. It cannot be done with out the current base load coal power.

    • Matt

      Dang gone it, I guess Germany had to remove all the appilances from their homes. Now wait, when I went to vist they still had the lights on.

      • RobS

        Wow, someone better tell the 665,215 solar PV installations in Australia with a capacity of 1.4 gigawatts who are all seeing reduced or eliminated power bills that they’re systems don’t really work and the savings they’re seeing are imaginary.

    • Bob_Wallace

      You kidding? (I hope that’s the answer. The alternative would be, what, substance abuse?)

      • Gary Wilson

        The biggest energy company Origin energy calling to end of grid connected rooftop solar power. Origin is asking the government to decommission rooftop grid solar power in Australia.

        • Bob_Wallace

          Hummm… Might we guess why?

          Kind of like that German minister, the one who has the fossil fuel portfolio, who wants to cut off solar and wind in Germany.

          Could it be that fossil fuel lunches are being eaten by renewables?

          With about 10% of all Australian homes having solar on their roofs, roughly 20% of voters solar owners, how responsive do you think the government is going to be? Think they’ll piss off that many voters in order to get some campaign cash from a utility company?

        • Zer0Sum

          Total BS. Origin Energy offers multiple 18 month no interest PV installation options. You own it after the 18 months. If PV is so bad then why is one of the biggest energy companies in Australia selling it to their customers?

          • Bob_Wallace

            Thanks for that ZerO…

            From Origin’s web site in which they help people purchase solar systems -

            “Take advantage of our 24 month interest free payment plan, just 5% up front and the rest over 24 months on your credit card^.

            Origin is Australia’s largest solar retailer with over 60,000 installations!

            Our 24 month interest free payment plan^ makes it easy.”

      • Patt999

        No you are wrong there is no squirrel in Australia Mate, which prove the point that grid solar power is endangering the wild life in Australia, you know that koala is endangered by grid solar power by cutting down trees that it was living in. Now wonder the squirrel is attacking the solar panel wires.

        • Bob_Wallace

          How many personalities do you have Sybil?

    • Actualelectricalengineer

      Shit, I need to rip the solar panels off my roof then. Wonder why my bill went down a third since installation? Guess it was electricity faeries.

      Also as a point of note, Tesla was told ‘you cant do that’ by his Professor in regards to the concept of the induction. Now how did that go again…

      Stop stating can’t, start asking how.

      • Brendan

        Yes someone should tell the 600,000 PV owners about Mike the legal man documented or yahoo7 news, what are you going turn a blind eye to what was broadcasted.

        http://au.news.yahoo.com/video/national/watch/26923501

        • Bob_Wallace

          Nah, Noreen.

          The video that you have been posting over and over is a lot of BS. All it says is that grid operators might need to work on parts of their system as more rooftop comes on line.

          Obviously the problem is minor. Otherwise the 600k systems already on line would have blacked your little island….

          • Michelle

            What about this: I found this in WA news paper thanks to 2 GB radio NSW with Brian show. Look like the lawyer’s will be knocking at your door. . It because BS solar grid connection system like your’s is causing this problem, I will sue too when the bad power damage my appliances in my home from grid solar systems.

            http://au.news.yahoo.com/thewest/a/-/breaking/13250702/solar-plan-creates-power-problems/

          • Bob_Wallace

            “The utility said in areas where about 30 per cent of homes on a power line had rooftop solar cells, the electricity produced by them was sometimes flowing in the wrong direction.”

            Smells like a barn needing a forking out.

            30% of homes install enough solar to create more power than the local grid can handle?

            Let’s assume the local grid is teetering on collapse. That it is barely able to supply the power needed when zero power is coming from solar and demand in houses is high.

            You’re going to tell me that there’s enough solar on those “30% roofs” to create more power than maximum 100% draw?

            Most likely what those “30% roofs” don’t use themselves is being sold to their neighbors and never getting to the larger grid.

            The only time electricity can flow “in the wrong direction” on the grid is when the utility company doesn’t want to accept input from customers. Most likely the extra solar being supplied by their customers is eating into their profits….

          • Bob_Wallace

            And here’s some more BS…

            “Massive incentives offered to WA householders to install solar panels on their roofs could push up the need for expensive and polluting power generation at times of peak demand.”

            Right now the utility can produce power for its customers, can it not?

            If rooftop solar comes on line during peak hours that means that some existing generation gets shut down. There would be zero need for new generation.

            Just the opposite of their claim. More solar means less polluting generation.

            This, IMHO, is a business trying to protect its profits and lying about the effect of customer owned solar.

          • Jack Hay

            Getting worse down under in Australia by the minute danger of Rooftop solar panel on fire: News paper report .

            http://www.adelaidenow.com.au/beware-shonks-in-solar-panel-industry/story-e6frea6u-1226218596322

          • Bob_Wallace

            Come on Michelle.

            Some electrician screwed up the wiring job or a squirrel ate through the insulation and you want to say that solar panels caught on fire?

            GeeseUs SqueezeUs. You and your multiple personalities are pathetic.

    • Hope
    • Luke

      You’re obviously not a very smart electronics engineer…

      • Bob

        Hey Luke, Expert warn of solar power damage to power network.

        http://au.news.yahoo.com/video/national/watch/26923501/

        • Luke

          Shit, I guess Germany’s going to have to reverse everything they’ve done then.

      • Noreen L

        I would like to know from you so-called money makers that are cashing in on the power utility company’s, how long before the power system can’t fund you and how long is it going to last?
        Chancellor Angela Merkel’s call solar grid powers a massive money pit; with current subsidies is threaten to bring down the Germany economy. The NSW & QLD liberal government had fallen into the same pit well before Germany with 10 billion dollar lost to the economy to rooftop solar in NSW Australia within 18mth. We have the highest electricity cost in the world of a western country, after this renewable energy.

        • Bob_Wallace

          Yet another poster with only a passing knowledge of the English language.

          Wonder how many actual individuals are participating in this farce?

        • Luke

          This demonstrates it isn’t a problem with rooftop solar, but rather with the way the power system is run. It’s gotta’ keep up with the times.

    • Nm

      Dear Electronic engineer; I am sending extra sand so you can bury your head deeper.

      • Bob

        Expert warn of solar power damage to power network.

        http://au.news.yahoo.com/video/national/watch/26923501/

      • Lisa

        I’m not an engineer but what I have read of Mike the legal man AU; I think that you have sand in your head. Look like you will be the first case in your country. My lawyer has advised not to go on with grid connected solar power just like Mike the legal-man pointed out in law. if you think you are above the law than good luck “MATE”.

        • Bob_Wallace

          Read of him?

          You’re posting from his address.

    • Tony

      I guess you guys didn’t read you liability for been solar power generator how dum is that. Don’t worry there all ready been two cases where the power company has sued grid solar power homes for damage to street transformer for over voltage. It costs the home owners, $135,000, plus compensation for the time down of the other residences for the loss of cold food storage and damage for appliance. Get you self a good lawyer to look at your solar power generator before putting power back into the grid.

      • Bob_Wallace

        Tony, I assume you and ee are the same person?

        Otherwise, how do we explain two semi-literate first time posters in the same thread?

        Bob and Tony, I should have said.

        We must have a three-in-one….

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