The case for Western Australia to become a major regional exporter of solar power will be presented to the federal government next week, as newly established company Pilbara Solar pitches for funding for its plans to supply renewable energy to Indonesia via a multi-billion dollar subsea cable.
The WA-based company, which is part owned by the Yamatji Marlpa Aboriginal Corporation, revealed this week it will have an audience with the federal government’s Northern Australia Infrastructure Facility in Cairns early next week, as well as with major international investors, to make the case for the ambitious project.
The meeting follows the findings of The Pilbara Solar Export Pre-Feasibilty Study, in August, which examined the possibility of developing a ‘pilot’ project to provide 3GW of Pilbara-generated solar to Indonesia’s Java grid.
As we reported at the time, the report found that a commercial case for the project could be established within five to 10 years time, including the multi-billion-dollar construction of a 1500km sub-sea cable from the Dampier Peninsula to east Java and three 1GW solar farms.
Pilbara Solar now seems determined to put those plans into action, starting with building medium-scale solar farms to supply local businesses and governments.
But this will not necessarily be easy. Despite the boom-time large-scale solar is experiencing in Australia’s eastern states, Western Australia is lagging well behind the rest of the nation in large-scale renewable energy development, not to mention the policy and funding to support it.
“It’s a whole new industry that WA doesn’t have, compared to the east coast,” said Simon Hawkins, who is CEO of the Yamatji Marlpa Aboriginal Corporation (YMAC), and who will be presenting Pilbara Solar’s case for NAIF funding.
And nor will it be cheap. The most recent cost estimates put capital costs at $5.8 billion for solar, $0.9 billion for AC interconnection of the solar farms, and $7.2 billion for the HVDC link and two converter stations to a landing point in east Java.
WA minister for regional development, Alannah MacTiernan, while fully supportive of the project, has been on the record saying that it would get no direct investment from the state.
But all of this is accounted for in Pilbara Solar’s plan – which is to start small and local, and build from there.
“It’s important to build up the local supply chain so that Pilbara solar projects are cost competitive with east-coast developments, and this explains our company’s strategy to build up solar capacity on the basis of local communities and industrial loads,” Hawkins told RenewEconomy.
“Once we open up and have examples in the Pilbara, we expect it should snowball from there,” he said.
As well as pitching to the NAIF, the company has lodged a funding proposal to the federal government’s Indigenous Advancement Strategy for a proposed three-year project, “Indigenous Ownership within the Pilbara Solar Industry: Building Capacity, Scaling Up and preparing for Export”.
If granted, Pilbara Solar said in a media release this week the funding would be used to kick-start development of in excess of 200MW of solar power capacity to supply local industry – particularly local miners in the region, who traditionally rely on diesel generators to power their operations.
“This is the first stage of a solar scale up that aims to establish a renewable energy export industry,” the release said. “The project will initiate potential export and commercial research relationships in the ASEAN region and complete an initial engineering design for a HVDC subsea cable and overland links.”
Another vital part of the proposal is the opportunity it presents for the traditional owners of the Pilbara region – a part of the plan that was highlighted in the pre-feasibility report. YMAC holds a 25 per cent stake in Pilbara Solar in trust for multiple traditional owner groups and wants to maintain or increase that equity as the business grows.
Meanwhile, Pilbara Solar’s pitch to NAIF will have to compete with renewed calls from Coalition party members – including the minister for Northern Australia, Matt Canavan – for the $5 billion facility to bankroll a new coal power plant in northern Queensland.
“I want to get a coal-fired power station in north Queensland (and there’s no reason) why that cannot be done through the NAIF,” Canavan told The Courier-Mail last month, within hours of having his potential dual nationality cleared by the High Court.
As we noted at the time, there are many, many reasons why the NAIF might not want to support new coal power – not least being that it is considered the least economically efficient and most technologically challenged source of new energy generation.
That said, NAIF has already demonstrated that it is not averse to using its funds to shore up fossil fuels, with its first loan issued to a shipping base that will service the oil and gas industry, in the Pilbara region.
But the Pilbara Solar project can at leas bank on the moral support of other businesses in the local mining industry, including lithium outfit Pilbara Minerals.
“NAIF should be thinking about Northern Australia as an amazing solar resource … long-standing, important economic infrastructure generating power, for all those reasons it is a logical space for NAIF to move into,” said Pilbara Minerals chief Ken Brinsden in comments to the AFR.
“We are a new mine, a greenfields site and we have come to the conclusion that if you are generating your own power, and especially if it is diesel power generation, then the economics now dictate that you should install hybrid solar solutions,” he said.
“Basically the sun replaces diesel during the day to some extent depending on the load. The cost of the renewables solution, especially with such a strong solar resource like that in the Pilbara, it has almost got to the point where it is a no-brainer.”