ARENA given $100 million funding boost for large-scale solar projects
By Mark Ludlow
The Turnbull government has allocated almost $100 million in new funding for solar projects as they attempt to change the nation’s energy mix away from fossil fuels.
But critics of the latest round of funding from the Australian Renewable Energy Agency say the money should be used for more innovative technologies like battery storage which will solve intermittency problems from wind and solar in the National Electricity Market.
Energy Council of Australia chief executive Matthew Warren said ARENA was originally a body to help embryonic technology get off the ground, rather than “writing cheques” for existing technology to enter the market.
“I think getting greater capacity in large-scale solar and solar thermal is probably a useful thing to do. But the question is whether that’s the role of ARENA,” he said.
“ARENA has now broadened its remit to be helpful and relevant but it’s not basically writing cheques for projects.”
ARENA on Thursday announced $92 million in funding for 12 new solar projects – six in Queensland, five in NSW and one in Western Australia – to deliver more than 480 megawatts of new solar capacity.
The investment from ARENA will unlock about $1 billion in commercial investment and triple the amount of energy produced by large-scale solar projects in Australia from 240 megawatts to 720 megawatts, according to chief executive Ivor Frischknecht.
It comes as ARENA fights for its own future with energy companies writing an open letter to parliamentarians to stop a planned $1.3 billion in funding being cut to the independent agency.
Some of the projects awarded ARENA funding include $20 million for Origin Energy’s $216 million 110 megawatt Darling Downs solar farm in Queensland, $10.9 million toward the $109 million 42.5 megawatt Manildra solar farm in NSW and $9.5 million for the $122 million 58 megawatt Whitsunday solar farm.
Mr Frischknecht said the funding was to help large-scale solar become a competitive energy source compared to coal and gas which currently dominate the energy market.
“They will provide enough energy to power 150,000 average Australian homes and deliver one tenth of the new capacity required to meet Australia’s 2020 Renewable Energy Target,” he said.
“Regional economies will benefit massively from the growing big solar industry, with 2,300 direct jobs and thousands more indirect jobs expected to be created by this round.”
The pressure is now on the companies to lock in the remaining finance and deliver the projects which are expected to become online by the end of next year. Some of the projects are seeking additional taxpayer funding from the Clean Energy Finance Corporation.
But Mr Frischknecht denied ARENA was biased towards solar.
“ARENA is not just focussed on building more solar. We want to bring down costs faster, fuel growth in Australia’s industry and give the next tranche of projects a head start,” he said.
Queensland Premier Annastacia Palaszczuk said the federal funding would help turn the Sunshine State into the “solar state”.
“My government promised to establish a large-scale renewable energy industry – to act on climate change while creating new jobs and diversifing our economy – which is why the ARENA funding decision is great news for Queensland,” Ms Palaszczuk said.
“I am proud that the largest solar farm in Australia will now be located on the Darling Downs, and that two of the three largest solar farms will be located in Queensland – we truly have transitioned from the Sunshine State to the Solar State. Combined these projects will generate enough renewable energy to power 120,000 homes.”
But some solar producers believe the taxpayer funding should be allocated to projects which use battery storage – a technology which they hope will overcome problems with renewable providing reliable supply into the NEM.
Lyon Solar partner David Green – whose company on Thursday announced a $400 million 100 megawatt solar power plant and a 100 megawatt battery storage unit in South Australia – said ARENA funding should be used for the next wave of technology rather than flooding the market with more solar projects.
“Most of the taxpayer funding into renewables supports solar or wind projects into the network. South Australia is a clear demonstration of that,” Mr Green told The Australian Financial Review.
“What is questionable is pushing large volumes of renewables into the market without addressing the issue of intermittency.”
Mr Green denied it was sour grapes because the Kingfisher project in South Australia missed out on the latest round of ARENA funding, saying they had funding from international investors to get them across the line.
It comes as the South Australian government on Thursday announced it would put 75 per cent of its long-term power needs out to tender in a bid to entice a new competitor into the state’s energy market.
The Weatherill government will also commit $24 million to encourage companies with existing gas reserves in SA – which now has 40 per cent renewables – to bring that to market.
Premier Jay Weatherill said he hoped the new proposals would boost power supplies in the state, increase competition and, most importantly, bring down power prices.