Australian Utility-Scale Solar Market Poised For Growth, Says First Solar
Originally published on RenewEconomy.
US solar manufacturer and developer First Solar says the signs for the large scale solar market in Australia are promising, with numerous initiatives in place to drive up installation rates and drive down installation costs.
Jack Curtis, the head of project development for First Solar in Australia, said the industry had a positive outlook, given the tenders for large scale solar from the ACT government (50MW), the Australian Renewable Energy Agency (200MW), Ergon Energy (up to 150MW), and the Queensland government (60MW), and the financing support from the Clean Energy Finance Corp.
Curtis said the change in governments in Queensland and Victoria, and the anticipated changes at federal level with the appointment of Malcolm Turnbull, had already changed the reaction from international investors, some of whom had been shy of Australia because of the perceived sovereign risk.
“It’s all very exciting. It is fascinating how the landscape can change from year to year,” Curtis said.
First Solar has been engaged with most of the initial large scale solar projects in Australia. It built Australia’s biggest to date, the 102MW Nyngan plant, is half way through the construction of the 53MW Broken Hill plant, built Australia’s first utility scale solar plant in WA, and has all but completed a 1.2MW installation at the Weipa mining facility for Rio Tinto.
Curtis described solar as a “global inevitability”, because costs will fall, and he agreed that costs in Australia could be halved with the reduction in financing and supply costs, and will head to single figures (meaning less than 10c/kWh – or less than 100/MWh).
“We have seen that in other markets, it (solar costs) only goes in one direction … there is nothing that cannot be replicated in Australia.”
Curtis, like others in the solar industry, is enthused by the 200MW tender being undertaken by ARENA, which is seeking projects around $135/MWh, with proof that they can and will be built. ARENA is providing $100 million in grants while the Clean Energy Finance Corp is offering $250 million in finance.
“There is a big focus on viability,” Curtis said. “This will make sure we don’t gt a bunch of crazies bidding stuff that can’t be delivered,” he added in reference to recent tenders overseas that had elicited prices that could not be delivered.
Curtis said there would be some “die-hard” resistance to renewable energy technologies, but pointed to the experience in California for what might happen in Australia.
In California, the utilities had fiercely resisted a mandated 20 per cent renewable energy target, but once they had seen the benefits and opportunities from large scale solar and other technologies, had pushed for the target to be increased to 33 per cent. That target has now been lifted to 50 per cent by 2030.
“The utilities thought it was crazy … they feared grid disruption. Then they became advocates … and the latest increases have been supported across the board.
Curtis said that in Australia, the sweet spot in the market was for installations in the 20-50MW range. These, he said, were big enough to “get people out of bed” and achieve economies of scale, and small enough not to create issues with off-take agreements and grid constraints.
Reprinted with permission.
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