The systematic dismantling of clean energy support schemes by the Abbott government – from the carbon price, the anticipated neutering of the renewable energy target, and the removal of key financial institutions – has effectively brought a halt to the industry in Australia.
Apart from a number of wind projects contracted before Tony Abbott’s election last year, or solar farms supported by the ACT government’s 90 per cent renewable energy target, the industry is pretty much at a standstill. Leading Australian renewable energy developers are pushing their focus on international markets, international players are re-assessing their presence in Australia, local manufacturers are fearing the worst, and the market is bracing for a jobs and a brain drain.
There are some 12,000MW of wind projects currently on hold in Australia, awaiting a market signal to unlock finance that may never come. These include 2,500MW of projects from NZ’s TrustPower, and dozens of other projects owned by foreign and domestic companies. An unknown number – but suspected to be around 3,000MW – of solar projects, both small scale and large scale, are in a similar position.
But it is the area of emerging technologies that will be hit hardest, as prospects for financing are removed by the conservative government’s grim determination to remove both the $10 billion Clean Energy Finance Corporation, and the $3.1 billion Australian Renewable Energy Agency – two agencies that could unlock nearly $30 billion of private investment in world leading technologies, and open the floodgates for billions more.
While ARENA has vowed to get on with business of funding renewables projects unless and until the Abbott government can make good on its Budget promise to axe the agency, it’s worth taking stock of what is at stake if the Coalition’s repeal of the ARENA Act makes it through the Senate come July.
Port Augusta Solar Thermal
The bid to augment or replace the existing Playford and Northern coal-fired power stations in the South Australian township of Port Augusta was already on shaky ground, given ARENA’s increasingly limited funding pool and the fact that the plant’s owner, Alinta, said in 2012 it would need $65 million from the government to consider developing such a project.
Now, however, the chances of the much campaigned-for solar thermal project – possibly with storage like the one pictured – progressing beyond a feasibility study – towards which ARENA has agreed to contribute $1 million, with $1.2 million to come from the coal plant’s owner, Alinta, and a further $123,000 from the state government – rate slim to none, at least with ARENA and the CEFC disbanded.
Collinsville solar hybrid
ARENA has also funded a feasibility study into transforming the now moribund 180MW Collinsville coal-fired generator in north Queensland into a 30MW solar thermal/solar PV/gas fired hybrid power station. The inclusion of solar thermal means that any project would likely need support from an institution like ARENA or the CEFC to lower the cost of capital.
Off-grid solar hybrid
In April, ARENA committed $410,000 towards a feasibility study of a potentially “game changing” portable hybrid solar-diesel power system that could be constructed off-site, would be stackable, storable and quick to set up or break down. The study – to be undertaken by global construction company Laing O’Rourke – would focus on the system’s viability as the power source for off-grid locations such as mining sites in outback Australia.
Big solar PV
According to ARENA, large-scale solar PV projects make up the majority of the 72 expressions of interest (EOIs) the Agency has received for its Regional Australia’s Renewables Program – industry stream – some of which ARENA had hoped to give the go-ahead for by mid year. In February, ARENA said it was making its way through submissions for its $400 million program to facilitate renewable energy projects in regional Australia, revealing that, in total, the applications were worth “billions of dollars.”
Almost all of the proposals involve hybrid solar solutions, integrating PV or PV plus wind with diesel or gas generation. Some involved battery storage, which some solar thermal projects were also on the table. A 5MW solar farm to be built by First Solar will be announced soon, but the fate of others is unknown. ARENA says if multiple projects can be funded, it could unlock billions of dollars in investment, helping wean Australian miners off the dirtiest and costliest of fuel sources.
Solar R&D
In January this year, a University of New South Wales team won a top industry prize (including $560,000 to go towards future research) for their work on PV cells, an achievement UNSW professor Stuart Wenham credited at least partially to ARENA support. Wenham’s team discovered a method to drastically improve the quality of low-grade silicon that both reduces the cost of solar panels and increases their efficiency. NSW’s patented technique can produce efficiencies between 21-23 per cent – up from the standard commercial cells of around 19 per cent. The future of other ground-breaking solar research activities, is now in doubt.
Geothermal
Australian geothermal up-and-comer Hot Rock Ltd told the Warrnambool Standard this week that the dissolution of ARENA would put paid to its plans to develop a pilot project in Koroit, western Victoria. Hock Rock – which not so long ago won $200 million in funding to develop 50MW of geothermal projects in Chile and Peru – said it would struggle to attract private funding for the Australian pilot scheme, despite the project’s promise as one of the most viable in the country, without the backing of ARENA.
Hot Rock chairman Mark Elliott told The Standard the federal government should be supporting the renewable sector as it did for the fossil fuel industry in the 1960s. “The government did it for them and now we have a substantial industry,” Dr Elliott said. “We believe the Koroit project has one of the best chances for commercial development in Australia.”
Geothermal was once considered as one of the major likely contributors to Australia’s clean energy system. And may still be over time. Other geothermal projects – such as the Habanero and the Paralana hot rock projects – retain funding, but it is not yet clear when these projects will get built. Again, it is a question of scale – the technology will need more than one or two demonstration projects to reach a level of commercial competitiveness.
Wave energy projects
ARENA has provided funding for numerous wave energy projects – including Carnegie Wave Energy’s CETO 5 wave energy and water desalination project off Garden Island, and Bio-Economics pilot project off Port Fairy. Two other projects, such as Oceanlinx’ 1MW plant – which sank in South Australia – and OPT’s much delayed Victorian wave energy project – have also been supported.
The question is, afar these first pilots, what will the incentives be to build more? The scale of development required to bring down the costs so they compete with other generation sources is a multiple of what is funded to date. The only place that may occur is overseas, where the incentives are both bigger and deeper.
Big ideas
ARENA has provided seed funding for studies into a range of other energy sources – from almond energy, to algae fuels, and “drop in” aviation fuels, as well as a host of new solar technologies, both PV and CPV – and to important “enablers” such as solar forecasting and grid integration. The question for these projects is: what happens next?
For a full list of ARENA projects, see this page.
Green Jobs
With Australia’s solar industry alone employing 15,000 people, the job loss fallout from the scrapping of ARENA is expected to extend into the thousands. As Director of sustainable energy systems at the Australian National University, Professor Andrew Blakers, pointed out in an interview with the ABC, this would be particularly bad news for regional Australia, where most large-scale wind and solar projects are developed.
“They go in the rural areas and farmers benefit from hosting these wind and photovoltaic installations because they get paid a rent for their land and they continue farming. It’s like a second cash crop,” Blakers said. “Then (there’s) the local earth movers and the people who build roads and people who maintain these systems and install them. These are all people based in rural areas that depend on increasing the supply of renewable energy which, after all, is ARENA’s main mission.”
