Australian Hopes Revive With 660 MW Dispatchable Solar Plan

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SolarReserve has now proposed a total of six CSP projects near Port Augusta in South Australia that would be clones of its 110 MW Crescent Dunes project in Tonopah, Nevada. SolarReserve’s dispatchable solar can be switched on day or night because it incorporates thermal energy storage.

I spoke with SolarReserve CEO Kevin Smith, who was at Melbourne airport.

“The Repower Port Augusta people have been supporting solar thermal technology for some time and actively recruiting investment into their community,” Smith told me this week.

“We have a site for our Aurora project, and we’ve had several meetings this week with local officials and the community, and we just met with the premiere of the state.”

He was in Australia about an extension of the project — building six CSP plants with thermal energy storage.

Aurora project

Initially, SolarReserve planned a single 110 MW plant with storage, as part of replacing the now decommissioned 260 MW Northern and the 240 MW Playford coal power stations in Port Augusta, its Aurora CSP project.

Aurora has had an unusual level of support from locals who are, as SolarReserve spokeswoman Mary Grikas put it; “reverse-NIMBYs.”

“What’s happening in Port Augusta, and the level of community advocacy for solar thermal is really interesting,” she told me at Tonopah in May.

“There are families who for generations worked in the coal industry, and now they are sort-of reverse NIMBYs —  “bring it on, we want CSP.” They want jobs, stable electricity prices, and clean air — like all of us. But they are also familiar with our technology, because we generate electricity just like conventional power plants — we have steam generation and turbines — and with their experience running coal plants they feel like “OK, I know that.”

Image Credit: SolarReserve Crescent Dunes’ multi-storey system for thermal energy storage and generation. The back end of CSP is the same as traditional thermal electricity generation.

A poll taken by Repower Port Augusta this year found across-the-board local support. Local Labour and Greens (Australian lefties) were at 81% and 83% respectively, while Liberal (conservative wing) voters were at 77% support.

Repower Port Augusta had lobbied the government, hoping for $100 million in funding, but had been unable to get movement after several years of pushing for the project during the Tony Abbott administration, but that was overturned by a Labour/Liberal (left-right) coalition government at the end of 2015.

“We’ve already talked to debt and equity investors who are excited about the opportunity in South Australia, and we have preliminarily secured more than 200% of what we need in the form of debt and equity,” said Smith

Finding debt and equity financing is no problem if they can ensure an off-taker: “If we can get the project off the ground; there’s no shortage of investment appetite into the project,” he said.

State government put out a request for bids

One such potential off-taker just put out a tender. The state government is looking for a renewable energy supplier to provide 75% of the electricity for its own government offices at the state capital.

The state government offices’ needs could be perfectly met by the Aurora project, which with its 8 hours of thermal energy storage would deliver 480,000 MW-hour annually of solar dispatched on demand by utilizing 880 MW-hours of energy storage capability.

(Initial reports were that the state premier had been under the impression that all CSP technology requires gas (like the Ivanpah CSP project) but Smith said he had been able to clarify how the SolarReserve technology doesn’t need any gas backup, because it has thermal storage.)

One obstacle for solar companies is that the state has instead considered just expanding the operating hours run by a partly disused gas power plant, even though gas price volatility has contributed to making Australian grid power so expensive. Pelican Point had long been running at half load and it would be running at full load if that were to be chosen instead.

“If it was a new build gas project we could beat it on price. But this is an existing power plant that was built 15 – 20 years ago and so now the company can lower the energy price, because they have zero capital cost to earn back,” Smith explained.

“However, the risk of gas price volatility is still a big issue, especially under a long term contract, as that risk is passed to the ratepayers. A solar energy project can provide stable long term prices without any fuel volatility.”

Another issue is that there is very short notice to fill these needs. The state government buildings need power in 2017. This is not enough time to build a CSP project, which can take three years.

As a solution, Smith suggested a contract under which during the three-year construction, they would deliver power by purchasing it off the market — “so we would essentially act as a utility” — before switching to delivering power from the first project itself, once complete.

Bigger picture: six CSP projects in South Australia

Ultimately, SolarReserve has proposed to build six 110 MW CSP projects in the top corner of South Australia over the next ten years, beginning with the Aurora project.

There is a very good DNI solar resource in this part of the state. These CSP projects would connect to the two adjoining grids as well, supplying power to Victoria and Queensland.

All three states have high renewable requirements. Victoria needs to be 40% renewable by 2025, Queensland 30% by 2030, and South Australia 50% by 2025.

Because South Australia already has a high percentage of hydro, it takes a lot less to meet its target. (Just six 110 MW CSP projects alone could supply 25% of the state’s entire electricity needs.)

SolarReserve is looking at siting the six projects strategically located where they can deliver power not just within South Australia, but into all three states’ grids.

The six projects would amount to a collective power station with a 660 MW of firm dispatchable capacity and at a set price per MWh, replacing the fossil fuel power stations being closed, and giving price certainty to grids that have seen a great deal of volatility with gas prices.

Image Credit: SolarReserve. CSP with storage gains value as the grid adds more PV. Australia is close to that level of PV saturation.

Now that Australia has begun exporting natural gas (as LNG: gas is compressed to liquid to make it transportable) prices have been skyrocketing. According to Simon Kidstone, who is working on hydro storage in a disused mine there, gas prices doubled in Queensland after exports began.

The six sites are in Port Augusta, Leigh Creek, Woomera, Whyalla, and Roxby Downs. Their construction would create a jobs boom, with estimates of 300 permanent jobs, twice as many as were lost when the local coal plants closed, and as many as 24,000 jobs during construction — 10,000 more than were employed in renewables in 2015 across all of Australia.

Building a series of projects in one region reduces costs too. And with an estimated 60% South Australian content, the proposed six CSP plants would help to develop CSP supply chain expertise in South Australia — which already is a clean energy leader in the country.

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