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Remote NT Solar hits 10 site target.

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The Northern Territory government has reached its goal of offering remote NT solar to ten remote Aboriginal communities – saving the usage of over one million litres of diesel fuel and representing a $27 million dollar investment in renewable energy.

Remote NT Solar Overview

‘Tranche one’ of the program has been completed – according to EcoGeneration, it will generate 3.325MW at the ten remote Aboriginal communities – via the installation of 10,000 solar panels. It’s being jointly funded by ARENA (Australian Renewable Energy Agency) and the Northern Territory government; with its estimated cost over the full timeline of the program at $55m – in order to save the usage of 94 million litres of diesel fuel. The project has been managed by Power and Water and is called Solar Energy Transformation Program (SETuP).

Power and Water CEO Michael Thomson was quoted as saying “The completion of tranche one is on the trajectory to transform the way energy is supplied with hybrid solar and diesel power generation – …the state of the art installation of integrated electricity supply will reduce emissions and local pollution with fewer fuel trucks and barges visiting the communities.”

The current remote NT solar farms will provide approximately of 5000 kWh/day to power more than 570 households, with another 12 communities in line to receive panels, Chief Minister of the Northern Territory Michael Gunner has advised. Ivor Frischknecht, the ARENA CEO, said “We’ve seen the benefits of renewable energy off the grid with mining and we know Solar SETuP can deliver the same results for Aboriginal communities”.

Remote NT Solar
Remote NT Solar (source: skynews.com.au)

As the installation of solar energy in the Northern Territory grows (despite receiving an average of nine hours of sunshine every day, year round, they have been lagging behind on solar PV installations), expect to see a lot more stories like this. It’s great to see the government and ARENA helping minimise the usage of expensive and polluting diesel fuel in favour of renewable energy. Have a read about the Dubbo Solar Project if you want to read more about solar power for Aboriginal communities.

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Small scale renewable energy certificates

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A sharp drop in the price of small scale renewable energy certificates (STCs) has led to a sudden and (for many) unexpected rise in the cost of household solar installations – which is estimated to be approximately 10%. This will have major ramifications for installers as well.

Small scale renewable energy certificates
Small scale renewable energy certificates price history (source: greenmarkets.com.au)

STC Prices – How and Why?

According to Greenmarkets.com.au, STCs trade on the wholesale market at minimum parcels of 5,000. As per the above image, their website shows the last 6 months of STC movement – it’s actually been stable for a couple of years before that as well. According to Tristan Edis via Renew Economy , this month the “supply of STCs is substantially outstripping power retailers’ obligations for this year as set by the Clean Energy Regulator”. Edis noted on Twitter this morning that he was incorrectly quoted in a section of that article – and that the Q4 forward prices for STCs are $30.50, not $37.85. This projects more pain to come for the industry (at their lowest on Wednesday the STCs were at $26). Edis said that this is as a result of the Clean Energy Regulator underestimating the amount of STCs that would come on the market this year – so they’ll need to account for that when setting 2018’s target in order to try and stabilise the cost and keep it around $40. The short term effect is a ~10% rise in the cost of installations, which will slow down installers and also could affect current install contracts they have.

Small scale renewable energy certificates – how will this affect the market?

The drop in STC price will have a significant effect on installers at the lower end of the market – many installs are quoted nett of STCs i.e. leaving the risk of STC price fluctuation in the hands of the installer.

The price of an STC refers to a rebate (per kW) of an installed solar system – calculating a drop from $40 to $32 means the price for a 5kW system will increase by around $600 (it varies from state to state). It’ll also mean any installers who have quoted nett of STC will be out of pocket by a similar amount – so any installers who have a lot of current installs on the books and a cash flow problem could find themselves in serious trouble over these drops.

It also means the end user will be paying ~10% more for their solar installs for the rest of 2017 – assuming projections from the forward market hold up. We’ll see how this impacts Australian solar power as a whole over the coming months.

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200MW Sunraysia Solar Farm in Balranald Proposed

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Sunraysia Solar Farm Two Pty Ltd (a subsidiary of the Maoneng Group) have proposed to develop a 200MW Solar Farm in Balranald (which situated in southern New South Wales) – if all goes to plan it will be the biggest NSW solar plant – at this point the plant has received approval but is still in the planning phase.

Sunraysia Solar Farm

Sunraysia Solar Farm
Artist’s Rendition – Sunraysia Solar Farm (source:sunraysiasolarfarm.com.au)

The Sunraysia solar farm will be located 17km south of Balranald centre – approximately 140km south-east of Mildura. It’ll consist of around 1,000 hectares of private freehold land and the preliminary layout provides for up to 200MW peak AC (MWp) of solar panels. This is not set in stone, however, the farm is currently in development process and once this is completed Maeoneng are hoping to start construction by the end of 2017. Construction is estimated to run around 12 months.

According to the Maoeng website, their proposal includes the development of a utility scale solar PV farm with a total capacity of 200MWAC. Stage 1 of the proposal would be 109MWAC and stage 2 would be 91MWAC (i.e. already converted into AC power, so factoring in any loss in conversion from direct current). The farm will fulfill Maoneng Group’s commitment to developing and delivering 1GW of solar facilities over Australia during the next six years.

According to the Vice President of Maoeng, Quiao Nan Han, “The development approval will be followed by further consultation with various stakeholders in developing detailed construction management plans,”. The solar farm will produce approximately 530,000MWh of electricity per year and is considering adding battery storage to the project down the track. Maoeneng have already successfully developed the 13MW Mugga Lane solar farm in the ACT.

If you have any questions or would like any more information on the project you can email [email protected] or call them on 02 9199 8599. Alternatively, Maoeng and the Sunraysia Solar Farm have prepared a promotional video about the project which you can view by clicking play below. As always, great to see more investment in renewables!

 

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Nowingi solar+storage to shake up the market.

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In the face of rapidly rising electricity prices (where the wholesale price has doubled over the last few years since the carbon tax was axed) – there’s a desperate need for a solution Australia wide – and the brand new $660m Nowingi solar and battery storage plant, whilst being far from a panacea, is certainly a step in the right direction. Built by the Lyon Group who are also responsible for a proposed $1b solar battery farm in South Australia to be finished by the end of the year, this plant, built by private investment, looks like it will be an iconoclastic undertaking – read on to learn why.

The Nowingi Solar + Storage Project

Nowingi Solar Farm Artist Impression
Nowingi Solar Farm (Artist’s Impression – source: lyongroup.com.au)

According to Lyon partner David Green (Lyon are a private equity firm backed by Mitsubishi of Japan and the Unite States hedge fund Magnetar Capital) to the Australian Financial Review, the project is one one of three which amount to almost $2 billion in investment (AUD). These three projects will be offered to utilities, retailers and end users by using a ‘world-first’ tender model. Green took a swipe at the bumbling government and their inept policies of the last 10 years and said “These things are happening despite governments, not because of them,” Mr Green said. “The private demand for renewable energy can’t be denied.”. They’ll initially be 100% financed by equity to facilitate rapid development, but at some point they will likely be refinanced with some debt capital (Green noted that one of Australia’s ‘big four’ banks approached them voicing interest). Lyon told the AFR that “We are seeing a really significant shift in sentiment in private sector capital.”

As of next week the Lyon Group will seek expressions of interest from market participants (generators, network owners, and energy users) for contracts and other services which will be able to use the 60Mwh of storage capacity the three projects, located in Queensland, South Australia, and Victoria, will create. The 250MW Nowingi Solar Farm (Nowingi is around 50km south of Mildura) is going to use 2.3 million panels to deliver power and also charge an 80MW (160Mwh) battery – and users will be able to bid for access to storage at the facility where in other circumstances they may have to buy at a much higher rate on the spot market. That is to say they’ll bid before (i.e. energy price arbitrage) the inevitable power shortages / heat waves / high price times – thus protecting themselves from the extremely volatile wholesale price (a very powerful proposition for businesses, network owners and utility companies alike – anyone whose business relies on using high amounts of energy).

Despite (perhaps as a result of?) Canberra’s weak and ineffectual policy, private capital is coming to solar energy in a big way – just yesterday we discussed this on a smaller scale with Complete Office Supplies’ private solar investment – and last week we had a look at Eco Energy World’s solar projects and their intent to offer energy directly on the spot market without signing a Purchase Power Agreement (PPA) with any utility groups. This plant is the natural progression of such offerings – and it’s great to see private companies stand up and offer solutions, rather than pandering.

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Finkel Report could raise cost of Solar in Australia

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The Finkel Report for National Energy Market security was released last week. Chief Scientist Alan Finkel’s review of the NEM included 50 recommendations, one of which was the implementation of a “generator reliability obligation” which could have serious ramifications for the cost of renewable energy in Australia. The closing of ‘dirty’ coal-fired power plants such as the 1600MW Hazelwood earlier this year has put a large dent in our installed capacity, which has been slowly sinking as we attempt to transition to renewable energy in an attempt to meet our 2030 Renewable Energy Targets (RET).

Finkel Report Australia MW Capacity Energy
Australian Installed Energy Capacity – 2017 Finkel Report

Finkel Report

According to the Sydney Morning Herald, under Finkel’s recommendations, the average household would save $90 per annum on their electricity bills over the decade from 2020-2030. This would be through the implementation of Finkel’s ‘Clean Energy Target’ – as opposed to a ‘business as usual’ situation. The report, which you can read by clicking here, notes that the value of Australia’s wholesale electricity market trades $11.7 billion. There are 9.6 million metered customers and, with rapidly increasing electricity prices it is obvious that something needs to be done. Balancing the price of wholesale electricity and the reliability of the grid whilst trying to meet climate change obligations is a very tricky and delicate process.

In an attempt to mitigate this, there are some repercussions for solar. The “Generator Reliability Obligation” and some changes to new wind and solar plants could pose serious problems for the next 10 years of renewable energy in Australia. Firstly, Finkel advised that plants be equipped to provide voltage and frequency response, which is reasonable. But the big one is a very controversial recommendation that individual wind and solar farms be self-reliant to provide ‘dispatchable generation‘ (i.e. backup power)  – rather than looking at more holistic/system-wide solutions. Even though many solar farms are being built with battery storage a ‘hard and fast’ rule like this could have implications for investment in large solar in the future (as battery storage costs have been shrinking, they are still significant).

The Finkel Report and the “Generator Reliability Obligation”

Kane Thornton, CE of the Clean Energy Council (the CEC represents businesses involved in solar and wind renewable energy generation) was quoted as saying – “Many new renewable energy and energy storage technologies and solutions are now available to help manage energy security”. Many large-scale solar plants being built these days are including battery storage

We don’t want a repeat of the the blackouts that plagued South Australia last year so it is understandable that energy security remains paramount whilst our energy economy transitions. It’ll be interesting to see which recommendations are taken on board and which aren’t – but I think the ‘generator reliability obligation’ could prove to be more trouble than it’s worth if it stifles innovation and curbs investment with blanket rules on new solar plants.

With the proposed $16.5b Carmichael coal mine by Adani Mining still being discussed (the mine is expected to produce 2.3 billion tonnes of coal over 60 years), it seems like we are reaching a flashpoint with regards to the crossroads of global warming, employment, and profit. The rest of 2017 promises to be a very interesting time for Australians and their electricity.

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