Big three “gentailer” EnergyAustralia has signed a deal to buy the output of a soon-to-be-built 43MW solar farm in New South Wales, and is looking to sign contracts with another 450MW of wind and solar capacity to meet its renewable energy target obligations.
In a sign that the big retailers are finally loosening their belts and and ending the contract drought that has brought the sector to a virtual standstill in the last three years, EnergyAustralia has agreed to buy the output from the Manildra solar farm.
Manildra, owned by Infigen and developed by US solar project developer and module manufacturer First Solar, was one of 12 solar projects that won grant assistance under the Australian Renewable Energy Agency’s large-scale solar funding round.
First Solar’s head of Australian development Jack Curtis said he could not reveal the pricing details of the 13-year power purchase agreement, but said unsubsidised solar projects were currently priced at around $80-$90/MWh.
That puts it close to many wind projects, and Curtis says that the market now expects around half of the large scale renewable energy projects needed to meet the RET target of 33,000Gwh by 2020 would be solar farms.
Prices of renewable energy certificates have surged to near $90/MWh on fears of a shortfall and because few projects have been built because of policy uncertainty, the lack of PPAs, and the reluctance of major banks to finance the projects.
Curtis said the ARENA funding round – Manildra will receive $10.9 million – had helped the current crop of projects meet that target band, but the cost of solar in Australia was falling quickly with the establishment of new supply chains and manufacturing and installation efficiency.
The announcement comes a few days after another ARENA-funded project, the 50MW solar plant at the old Kidston gold mine owned by Genex, also secured financing. That plant is a precursor to a unique proposal to combine large-scale solar with a pumped hydro storage facility.
EnergyAustralia, which owns the Yallourn brown coal power station in Victoria, and the Mt Piper black coal power station in NSW, says it expects to contract a total of 500MW of wind and solar projects in coming months.
EnergyAustralia owns two of the largest coal-fired power stations in the country, providing customers with reliable, affordable electricity,” managing director Catherine Tanna said in a statement, noting that the company’s operations generated more than 20 million tonnes of carbon dioxide a year.
“Owning big power plants comes with the responsibility of promoting and leading the development of cleaner forms of energy,” Tanna said. “That’s why we’re committing to buy 500MW of power from new solar and wind projects around the country, providing the support they need to get built.”
It is also a legislated requirement under the RET.
Construction the Manildra solar farm is scheduled to commence in early 2017 for completion in 2018.
“Today’s announcement is representative of the widespread support for utility-scale solar as a competitive and bankable energy source in Australia, and we congratulate EnergyAustralia on their leadership and commitment to renewable energy,” Curtis said in a statement.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.