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Huge 300MW solar farm begins construction near Port Augusta

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The first two stage of a 300MW solar farm – Australia’s biggest – has begun construction near Port Augusta in South Australia after its developers last Friday reached financial close on the project, and agreed to sell it to two of Europe’s biggest investors in renewables, Italy’s Enel Green Energy and the Dutch Infrastructure Fund.

The first two stages, totalling 220MW, of the Bungala project is being built around 12kms from Port Augusta, where the state’s last coal fired generator closed last May. Ironically, project developer Reach Energy is headed by Tony Concannon, the former head of the owners of the Hazelwood brown coal generator in Victoria which closed late last month.

The two first stages of Bungala will be completed late in 2018, and will be built by Spanish company Elecnor, which recently completed the 57MW Moree project in NSW and the smaller 21MW Barcaldine project in Queensland.

tony concannonBungala will be built “battery storage ready”, and will also likely be the first major solar farm to participate in Australia’s FCAS market (frequency control and ancillary services), using SMA inverter technology to provide voltage control for the grid.

Concannon says the remaining 80MW of capacity could be built – along with battery storage – should the company win a South Australian government tender for 25 per cent of its electricity needs with “dispatchable” renewables.

Reach has submitted proposals for both 20MWh of battery storage and 100MWh, although it did not participate in the other tender for a separate 100MWh battery unit. If the tender is not successful, there are also discussions with other potential off-takers in train.

Concannon’s company, which is looking to develop 1,000MW of solar in Australia, has secured off-take agreements for the output of Bungala 1 and Bungala 2 with Origin Energy, raised $320 million of project finance debt, and found equity buyers for the $450 million project in Enel Green Power and DIM. And all without government grants.

It is one of a number of large scale solar projects proposed for South Australia, but the first to actually begin construction.

“That’s the difference with some of the others,” Concannon told RenewEconomy in a telephone interview on Tuesday. “Some of them have had lots of publicity, but are going nowhere. They don’t even have grid approvals.

“But with us, there are no “ifs” and no “buts”, it is definitely happening. We’ve done that deliberately (to keep a low profile) – Port Augusta has had a number of false dawns.”

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News of the Bungala project comes as a big wind project, the 212MW Lincoln Gap, located 15kms west of Port Augusta, signed a power purchase agreement with electricity retailer ERM, with construction likely to begin later this year.

On prices, Concannon says that solar is currently “viable” in the mid $70s/MWh, and believes that within a few years, the combination of solar and storage will be “way under” $100/MWh, making it even cheaper than gas-fired generation. (He recently said the combination of solar and storage was already cheaper than gas power).

That, he says, will bring major changes to the grid. “I have no doubt that it (battery storage) will be the future, but I do think there is a lot of other stuff that existing plant can do.”

South Australia is already nearing 50 per cent wind and solar, but Concannon does not see any major threat to grid stability or reliability.

The new plant, he says, will be designed to provide FCAS – even at night, after the sun has gone down. “What a number of people don’t realise is that you can design ancillary services for solar plants to operate at night time.

“We can draw in power from the grid at night, and use the inverter technologies to regulate voltage, and that helps stabilise the system, even when the sun is not shining.”

Unlike battery storage in households, which he describes as mostly “passive” and focused on converting the output of solar panels from DC power to AC power so it can be put into the grid, utility-scale inverter technologies are able to shape voltage and current very quickly and in a very flexible manner. Modern wind farms are also using the same technologies.

“The inverter changes phase between the voltage and current … inverters can pull the current in, and change the phase to what grid wants.”

Concannon, a power engineer, says it is a tricky subject to try and explain, but says a lot of the articles he has read in the media – about wind and solar not being able to provide grid services – are wrong.

“Some of the articles I have read in the press are wrong. It is a tricky area, but what you can get with fast-acting inverter technology – they can definitely assist in managing the  grid. They can react on frequency, in particular, much faster than gas and coal-fired plants.”

Reach has a 1,000MW solar pipeline, with the remaining project focused around NSW and Victoria. And the former executive of a major fossil fuel focused company is enjoying the focus on solar

Concannon left the “big corporate” world after a family illness and says he “personally felt that large-scale solar was something I could do on a start-up basis.

“The risk allocation was right. I couldn’t say that I had been totally green for the last 25 years, but I did have experience in bringing complex structured deals, and could figure out how to make solar competitive with wind, and how to do it without grants. We are pleased we have done this with no taxpayers’ money,”

Origin Energy chief Frank Calabria also stressed the importance of big solar in Australia, and particularly South Australia, as a counter-balance to wind energy as the shift to renewables accelerates.

“Energy markets around the world are in transition and Australia is no different,” Calabria said in comments on Tuesday. “We must make sure our energy supply is secure, as Australian homes and businesses rely on it. At the same time, we must make sure energy continues to be affordable as we move Australia towards a cleaner supply.”  

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  • Face the facts

    Once again no idea about energy markets in Australia and how they operate . These are not and i repeat not base-load generation . SA has lost 3600 MH and these so called politicians and band aid solution companies think that solar and batteries will replace this ??? ….Prices are though the roof in the wholesale markets people …..the increase will adjust slightly however SA will still be up for high commodity prices especially this summer coming due to the Hazelwood closure. SA manufacturing cannot compete anymore as OPEX is through the roof. The solution is simple spend that $550 million on a brand new Coal fired generator to only be used for South Australia to balance the prices and reduce demand in SA and force commodity prices down. Use the best model in the world that is currently in use in finland energy efficiency directive. They have done the necessary research and has Coal fired as well as many other forms of generation generating 14.8% of coal fired generation only. Our politicians need to do there homework and see how Denmark are now and worked towards a 0% coal fired generation by using this method. This country has no brains anymore and will head into bad times with the decision that are made without research or better yet to get balance of power with the greens to rule the country.

    • AllanO

      Half of your post seems to be written in Finnish and Danish. Could you please provide an English translation so we can work out what it is that you are saying?

    • brucelee

      How do you build a new coal plant in 6 months when its needed?

      What do you do with it 2 years after that, when it’s not needed and doesn’t compete against solar and wind on price?

      If OPEX is through the roof, how does all the labour, maintenance, fuel required by coal compete with solar that just sits on the ground, get cleaned occasionally?

    • Gyrogordini

      No.

      • Face the facts

        I am negotiating $400 million dollars worth of commodity market contracts this year alone and these clients are looking at an average of 23- 38% increase on energy changes alone. This means Jobs will go as many have told me and also noncompetitive within there industry. . This country was not ready and didn’t plan for closure of base-load generators and should have had a policy in place from many years ago when they decided to reduce carbon emissions . Solar , wind and hyropower are an option and these projects should have been increased heavily with the carbon tax that was introduced but was not therefore meaning that the clean energy generation was never really funded properly and never taken seriously enough to wind down coal generation and be as competitive as coal generation . BruceLee it would take longer than 6 months to build one mayby the government should have taken back these assets and used the money that they made from these assets to build renewable energy assets that can provide base-load generation. The government could have easily ran those generators just for each states needs and applied legislation to have solar , wind , hyro, bio-mass compete against coal and grow the renewable markets to wind down coal fired generators like Denmark and many European countries are right now. Did you know that 2 tons of coal produce 1 MW of electricity ? Did you also know that 1 Tons of wood chip left over from loggers stumps can produce 1 MW in a biomass generator. Did you also know that whilst out loggers log our forests they leave the stumps in the ground produce carbon whilst they decompose . As i said this government and the previous government and it looks as tho future governments are just not doing research they are just adding band aid after band aid and making things very bad .

        • Ian

          We have a saying ‘first world problems’ good luck sorting out your very Danish issues!

  • George Darroch

    Concannon sounds like someone who has done his work. If this is successful, I imagine that this will be the first of numerous large projects across Australia.

    • Sir Pete Gossner

      There are quite a few large projects in process already.
      Some more large scale PV some more onshore Wind and hopefully soon larger scale Solar Thermal.

      There are also battery proposals that total up to at least 500 MW raw storage.
      (battery stores will probably be profitable to retrofit to existing wind farms at least.. and Gas CoGen etc)

      Its going to be interesting to see the real cost of the transmission network increasingly exposed as the wholesale cost comes down, with increased raw capacity AND vastly more sophisticated surge capacity.

  • Ian

    If inverter technology can be used for FCAS without an external energy source like solar or batteries, as this article suggests( nighttime FCAS without battery storage), then why have this technology located at the end of a transmission line? Could this not be installed anywhere such as at the substation level?

    Certainly power electronics can correct for reactive resistance, for instance at a shopping centre, and this can save a large consumer money. You’d wonder if FCAS can be achieved anywhere and everywhere along the supply chain, wherever power electronics are installed.

    • stephan011

      To do this, the don’t export all the energy, saving some in reserve, so it involves some losses.

      • Ian

        I understand that. What you are saying is (not meaning to offend) old hat. Concannon says his plant will be ‘battery-ready’ he then goes on to say it will participate in FCAS, later he says that not many people realise that solar plants can provide ancillary services even at night, precisely because of the inverter technology and finally he tells us how it is done: you take power from the grid and use the inverter technology to regulate the voltage. He reaffirms this further on saying that the inverter draws the current in from the grid and changes the phase between voltage and current. He also talks about frequency control. That is the magic of power electronics, the grid itself is the “spinning reserve” or energy source for this electronic trickery. My reading of Concannon’s comments is that this is all achieved without battery storage. It would be nice if Concannon could clarify this last part.

        It is certainly true that there are electronic devices that can correct for reactive phase change. These do not involve electricity storage batteries. For instance, a consumer with a number of electric motors or high inductance lighting can avoid paying phase shift charges by installing such a device. Concannon seems to be implying that his inverters will provide this service and probably more- all without batteries or the actual solar backup.