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A 60MW solar PV peaking plant – kite flying or the future?

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There are possibly several dozen different significant large-scale ground-mounted solar PV projects being put together around Australia. Many are seeking to keep a low profile, for a bunch of different reasons, and at least until the finance and approval is locked in. Vulcan Energy’s Rob Campbell is not so inhibited.

Last week, the battery storage company head floated an idea for a 60MW solar PV to be constructed on the Gold Coast, which could be tied with battery storage and act as a solar peaking plant, challenging the primacy of gas generation in this part of the electricity market.

The idea, and it is important to point out that it is not much more than that at the moment, got an airing in the local paper, the Gold Coast Bulletin, which awarded Campbell the title of “king of solar”, and on the ABC radio.

Campbell makes no apology to going early with this idea, partly because it was a fishing expedition to see what would happen, and partly because he wants such ideas to become the mainstream of discussion around Australia’s energy needs, rather than the traditional focus on centralised fossil fuel generation.

“I am deadly serious about wanting to build this plant,” he says. “But the only way I can get the ball rolling from is to bring the conversation into the public realm.”

The initial plans drawn up by Campbell call for an initial capacity of 60MW of solar PV to be build over 120 hectares of unused flood plain at Merrimac, next to the Skilled Park stadium owned by the Gold Coast City Council.

It would include 150 megawatt hours of storage for evening and morning peak supply – the parts of the day most challenging for the network (and costly to consumers).

Given that no one has yet built a solar PV farm even one twentieth of that size in the National Electricity Market to date, it would seem an ambitious plan, particularly with the storage element. (It should be noted that in the US, utilities are dumping plans for peaking gas plants and replacing them with solar PV, but none have yet suggested these plants could come with storage attached. It is generally considered that solar thermal with storage is the best option of costs).

But Campbell estimates the capital cost at around $150 million, about a third of which would be the battery storage component. That would surprise many people but he says a contract of that size would be able to deliver storage arrays at a cost of $3,000-$3,500 per 10kWh unit. That remains to be seen.

Campbell says a peaking plant will have the ability to cherry peak highest prices. Peak demand is significant on the Gold Coast with its huge penetration of air conditioners, and a peaking plant would enable solar to respond to that demand further into the evening peak. It could also address the morning peak, and there is also the Robina Shopping Centre nearby which could take a supply agreement from the plant.

“By including substantial storage in the design for this solar farm, it is possible for it to compete on a purely commercial footing by tracking spot prices on the energy market a supplying at times when demand, and therefore revenues are at a high point,” Campbell says.

The idea of using flood-prone land good for little else evoked interest from government authorities, keen to earn some income from otherwise barren land. Campbell says an installation would be built “above round” and would in fact enhance flood storage and overland flow on the site.

It would comprise around 220,000 panels, employ 400 people during construction, 20 on-going, and would connect to a nearby 100kV feeder. It would probably need finance from an institution such as the Clean Energy Finance Corporation, if the Abbott government has not already closed it.

Campbell says that costs for solar power have decreased dramatically in recent years and are set to drop further. “With the advent of cost effective and reliable storage, solar can now provide power at a lesser cost than construction and operation of coal fired plants. As consumers continue to try and fight off rising electricity prices, the tipping point for large scale solar has now been met and surpassed.”

Well, maybe not quite, but possibly sometime soon.  

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  • suthnsun

    There is a tone of circumspection in your article Giles? I don’t see any reason to disbelieve the costings. Such panel prices and battery storage costs are being demonstrated in volume applications with greater technical hurdles every day. A project like this tuned for cost effectiveness and with ongoing daily supervision should be feasible as long as land and permitting is possible at suitable cost and realised prices in the market are sufficient. I assume Rob Campbell is in a position to know.

    I am highly biased in favour of course. To me it is a very attractive prospect and having the concept in the mainstream is very helpful for the ongoing argument wrt cessation of fossil fuel burning, provided it doesn’t fall flat due to technical shortcomings.

    With a little good fortune and a fair breeze, by the time it comes to be built the storage costs will be sub $200/kWh anyway. Considering the very large number of novel storage technologies in development and advances in current technologies it’s hard to see it going backwards! I wish them every success.

    • Robert Johnston

      Optimistic indeed. Good on this guy for having a crack. Clearly he has NO IDEA though. If finding somewhere to sell your energy is the least of your problems (as he said in the Gold Coast Bulletin), then your project is dead in the water – even if its not on a flood plain! (or plane).

      • suthnsun

        So Robert Johnston, you are thinking that he will have trouble selling his energy, whereas he thinks that’s the easiest part? I don’t know the situation but in a growing area with access to the grid on the spot what would be the impediment?

        • Robert Johnston

          Finding a willing buyer. The market is structured so that it is not that easy to sell direct to a user unless you generate behind their meter, so generally end users contract with retailers (unless they are a HUGE industrial user) who aggregate generation and retail loads which have different profiles. As the generation market is currently in considerable oversupply and the retailers say their LGC liability is covered until – what are they saying now 2017/18? – the retailers aren’t supporting new renewable projects by buying their energy. So Campbell needs to find a customer (or many) that can take up to 60MW, is willing to pay distribution charges on top and is also able to do a reasonable deal with a retailer to meet his night time load (storage helps but not at current storage prices). Not easy – ask any windfarm developer. And all that assumes the grid there can manage a 60MW project (cost to sort that out with the networks is the best part of $600,000 and 2-3 years – just for the studies and dealing with the networks not the connection works themselves). Yep, he has a few problems. Many resi and small commercial solar companies have great ideas, implementing them is not as easy as it looks.

          • suthnsun

            Thanks for your detailed reply Robert Johnston, I notice that Rob Campbell has inserted a comment above saying that he hopes to avoid the 275kv distribution charge of $35. I have also noticed that Queensland seems to have consistently higher prices on the AEMO website, so presumably selling on the spot market there is better than in most places and also less oversupply? It will be interesting to see if he can get it off the ground.

        • Robert Johnston

          He can sell on the spot market of course, plenty of generator owners have gone broke doing that. Its impossible to make a solar project work with $45/MWh and its generally less than that. Maybe $90 total if LGC’s still exist after Abbott is done looking at the RET – but it still doesn’t work.

  • Concerned

    Flood plane?

  • tsport100

    The battery cost number even sounds a bit high.

    The current open market price for 18650 Li-Ion cells (same size used by Tesla Motors) is approx $1080 per 10 kwh. (and that’s the ‘retail’ price on eBay) Adding cooling, enclosures and a BMS shouldn’t triple the cost!

  • Mick

    …If you think you can build battery 150MWh of battery storage (presumably with nameplate rating of 60MW) for $50 million, why would you bother with the solar PV. That would be an expensive way to charge your batteries.

    At that price for storage straight arbitrage would probably be economically viable… Presumably you could ‘charge’ the batteries with grid electricity when the price is ‘low’ (say <$30-$40/MWh?) for much cheaper than you could get electricity from a solar field.

    At that price, (~830/kW), and paying for cheap electricity rather than increasingly expensive gas, it would be competitive with a gas peaking plant… Which begs the question – why isn't one anyone else doing this?

    • suthnsun

      Mick, I suspect the installed cost per watt for panels will be under $1 and with good solar conditions and a decent finance rate and low land lease, the energy cost will be well below $30, the risk is far lower that way rather than depending on grid conditions to supply at low cost when prices might be generally high i.e hot weather. Also it gives the flexibility to cycle the batteries optimally for returns.
      ‘why isn’t anyone else doing it’ – good question, it’s been on my mind for some time – even why aren’t ff generators using storage in one or more of the many forms now available – they could be optimising efficiency, lowering emissions intensity and maximising returns by doing a load following role. I would be surprised if they are not actively planning for this – it seems a far better option than CCS.

      • Catprog

        from the article $150 million cost. 1/3 batteries = $100 million for solar.

        60MW of solar.

        The other 40 million probably includes the land cost.

    • Catprog

      But how many days would you be able to buy your electricity at that price.

      Daily cheapest half hour (averaged monthly)

      October: 46.89,September: 43.35,August: 46.05,July: 45.60
      December: 39.86,January: 37.28,February:13.47

      Taking out some strange negative figures from those months:

      December: 42.46,January: 41.67,February:43.45

      Accounting for not getting the cheapest time correctly. $45-50 is a more appropriate grid cost.

      Which compared to solar is (4hours/day ,10 years) $114,(5hours/day ,20 years) $45

      • Catprog

        Possibly the grid could even be over $50 when you include the extra generation for charging the batteries.

      • Mick

        I take your point ($30-$40 was a rough guess – and really not too far off) – however, there is no reason to discount “strange” negatives… That is a fairly regular occurrence, particularly in SA.

        Even at $50 – the point remains – I’d love to see how you could get solar energy at $50 (or $45 as above)… That is almost a quarter the price (!!!) of the electricity coming from the recent successful project in the ACT scheme – ($189/MWh I think).

        This also begs the same question as above: if solar could really be produced at $50/MWh – how come we are not seeing a huge explosion of utility (and/or rooftop) solar installations?? That is below grid price!!

        • Catprog

          The strange negative in question was -$800 at 7am on one day in February. (and some other odd figures at 5,5:30 and 6:30 surrounded by $39 figures at 4:30,6 and 7:30.)If you were a storage company your storage would most likely already be filled from the earlier night time power.

          For SA negatives are common (mostly due to your wind), but not so common in QLD.

          20 years * 5 hours * 365 days * 60MW = 2,190,000MWh
          100 million/(20*5*365*60) = 45.67

          The problem is 20 years time periods. For residential solar though the cost of the grid is not $50/MWh but more like $300/MWh

          • Mick

            So in your evaluation your assuming a 0% discount rate – (not to mention no operating and/or maintenance costs – which exist for large scale solar). Let me know what planet that makes sense on. Would love to get my hands on some free money.

            Do that calculation again for even a modest (say 5%) discount rate / cost of capital and you will have a very different answer.

            Again, if you can really build it that cheap, why isn’t being built?

          • Catprog

            I am also not including the increased cost of energy in the future.

            And the reason it is not being built is the 20 year pay back time.

          • suthnsun

            At a 5% discount rate, $1 per watt installed and 1/2% O&M pa. and over 20 years, the calculation is 4.7c/kWh. Remember we are assuming from your question that the batteries, inverters and power conditioning is already present and seeing why Rob Campbell would want to install his own PV generation.

        • Bob_Wallace

          Here’s what’s happening in the US. In terms of end-user rooftop you folks are installing for about half our national average. Our utility scale solar (before subsidy) is roughly the same as your residential rooftop.

          “The cost of large-scale solar projects has fallen by one third in the last five years and big solar now competes with wind energy in the solar-rich south-west of the United States, according to new research.

          The study by the Lawrence Berkeley National Laboratory entitled “Utility-Scale Solar 2012: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States” – says the cost of solar is still falling and contracts for some solar projects are being struck as low as $50/MWh (including a 30 percent federal tax credit).”

          “Another interesting observation from LBNL is that most of the contracts written in recent years do not escalate in nominal dollars over the life of the contract. This means that in real dollar terms, the pricing of the contract actually declines.

          This means that towards the end of their contracts, the solar plants (including PV, CSP and CPV) contracted in 2013 will on average will be delivering electricity at less than $40/MWh. This is likely to be considerably less than fossil fuel plants at the same time, given the expected cost of fuels and any environmental regulations.”

          http://reneweconomy.com.au/2013/big-solar-now-competing-with-wind-energy-on-costs-75962

          Adding back in the 30% ITC makes the cost something above $60/MWh. Selling price includes items which would not be discounted by the ITC. (Land, transmission, profits)

        • suthnsun

          Catprog’s figure is closer than mine,I had an error. Why not an explosion – I think the commercial self consumption case is an explosion just starting to erupt, there is a compelling case if rooftops are available and self-consumption can be engineered. I am hearing very low panel prices for these types of jobs. Commercials are not allowed to sell their output in general, the ACT case is loaded with other costs + margins

        • Rob Campbell

          Have you amortized the costs, I’m sure you will find a more favorable out come.

      • Rob Campbell

        One of the key things to putting these things right next to the markets is the fact that if you can avoid the scenario of not being able to produce at peak times, which I think we can do, we don’t need to pay for the 275KV distribution as part of the equation. That adds $35.00 per megawatt straight away to the amount of money available for this power we are wanting to produce, and, if we are forced to pay it even though we can prove we aren’t using it, we’ll take ’em to court!

  • coomadoug

    Some good things about DC storage are as follows.
    Energy can be located at the most effective location on the grid for optimum effective stability control and peak load supply. As well, it can be switched into the system on a milli second time frame.
    At the moment generators burning coal and hydro plant are run inefficiently in order to provide such stability and load support. They also have long time delays of delivery by comparison.
    The reality is, the battery stored solar energy may well sit there in the battery and recieve contractual payments for various energy market products without being used.
    The entire output of the solar would then be sold onto the grid.
    The management of this coming technology has many things possible that most bloggs I read have no idea yet.

  • JonathanMaddox

    Ground-mounted solar PV panels necessarily have a low profile.