rss
8

AEMO receiving huge increase in enquiries for wind and solar projects

Print Friendly

(Note: The Australian Energy Market Operator has asked us to correct the information in this article, recognising that its CEO “misspoke” during the hearings in Canberra. Rather than an increase from 20 to 1,000 requests a month, AEMO now says enquiries about grid connections for new wind and solar plants have increased from “very few” to around 20 a week).

The Australian Energy Market Operator says it is seeing a phenomenal number of enquiries for new wind and solar projects across Australia, with the number of requests jumping sharply in recent months.

New CEO Audrey Zibelman, appearing in before a parliamentary committee on the modernisation of Australia’s electricity grid in Canberra on Friday, originally said that the number of requests had jumped to nearly 1,000 a month, from around 20, but AEMO later corrected this to say the jump was from “very few” to around 20 per week.

Renewable energy = cleaner air, economic benefits, and lower carbon emissions

The huge increase in interest follows the plunging rate in the cost of wind and solar in recent years, and in recent months. Origin Energy recently signed a deal for the country’s biggest wind farm for around $55/MWh.

Development is also being pushed by the demands of the national renewable energy target, high wholesale electricity prices, and state-based initiatives.

“The cost of wind and solar are coming down,” Zibelman told the conference. “And they are easier to build (than fossil fuel generators). The developers are making economic decisions, they are not making environmental decisions.”

Ivor Frischknecht, the CEO of the Australian Renewable Energy Agency, said wind energy was being built at a cost of around $50-$60/MWh, and solar at $70-$80/MWh.

This compares with prevailing wholesale prices of between $80/MWh and over $100/MWh, driven by the high cost of gas and the surging prices at time of peak demand.

Zibelman’s estimates of connection inquiries follows revelations by the likes of Transgrid, who said that more than 6,000MW of large-scale solar farm requests had been made in the last 12 months in NSW alone.

In Queensland, there are dozens of solar projects already in construction or about to start, and many more seeking development approval and connection status.

In Victoria, the government’s state-based target will require some 5,000MW of new wind and solar to be built over the next eight years, although network constraints will influence where and when these are built.  

Share this:

  • Andy Saunders

    And don’t forget the LGCs…

    • Ian

      Yes, can someone explain the LGC’s. These are payments on top of the wholesale price but there are a limited number available and the price varies. Once a claim is made are these LGC’s locked in or does the price continue to vary and does the number of legible LGC’s available to that generator remain fixed.? You can imagine when all these developments have been completed there will be a lot of competition for the LGC pot.

      • Alastair Leith

        http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Power-stations/Large-scale-generation-certificates

        Retailers must surrender RECs (RE Certificates) when they sell conventional energy. One REC for each MWh of energy they sell. They can generate their own certificates by owning wind wind and solar farms or be in a PPA with one to buy the certificates and power or they can trade in RECs on the market. They can stockpile them or they can buy as they need them, so trading them inherently speculative given the changing price.

      • So, there are not many developers that are pocking the LGC’s at the moment, only those with deep enough pockets or ability to finance and go partly or fully merchant. Anyone with contracts, and that is 90% of developments, is giving LGCs to retailers, so the likes of origin, agl and energyaustralia are cashing it in. By not investing for three years they created scarcity, LGC prices went up, now they getting them for next to nothing and delivering them for a profit. But, and this is important, once it is clear that RET is being met, and there may even be a surplus, the price of LGCs will slump sharply. So no-one is really banking on the LGCs, some are just making hay while the sun shines. A better result might be auctions, like the ACT and Victoria’s. The ACT did not use LGCs and neither will Victoria post 2020. But auctions depend on governments being serious about their targets.

  • Do we still need LGC’s??

  • Craig Allen

    What is meant by “wind and solar projects” in this article. Does this include residential and business rooftop solar installations?

    How does this relate to the story ‘Renewable energy investment is booming but there are clouds ahead’ http://reneweconomy.com.au/renewable-energy-investment-is-booming-but-there-are-clouds-ahead-89993/
    Are these thousand projects a month a crazed rush to get projects completed before the availability of long term contracts dries up as explained in that article.

    Or are most of them home owners and businesses building systems for self consumption and therefore not affected by power purchase contracts?

    It would be interesting to see a breakdown of the kinds of projects involved.

    • Mike Shackleton

      Logically, these requests do not include residential and business rooftop connections. If they have gone from 20 requests a month to 1000 a month, that would say to you, no way is rooftop included in this. They are handled through the local grid owner – just to make sure the local grid has capacity for the solar output and my understanding is you only need special approval if you grid connect more than 5kW of capacity.

  • George Parry

    While there may be local factors affecting this rapid renewables uptake, the trend is clear. The cost curves are crossing. A fifty-fold increase? Certainly. When an emerging technology, through the miracle of Moore’s Law, becomes cheaper, then significantly cheaper than the incumbent technology then it’s a rush for the exits.
    Solar and wind, geographically distributed, will prevail at breathtaking speed (as evidenced in Giles’ article) over fossil energy. The bottleneck is storage and I believe Mr Moore will step in with batteries and CST. Both of these are at the top of the price crash roller coaster.
    Andrew Blakers (energy.anu.edu.au) proposes pumped hydro as the 450GwH battery. The quandary is time. By the time pumped hydro is constructed, 24/7 CST and solar+batteries will have crashed through $100/MwH.
    I’d take a bob each way.