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Sunshine state aims to become Australia’s solar state

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The state of Queensland appears ready to embark on what could be one of the most radical transformations of its electricity network ever undertaken – even by standards of ambitious mandates in places such as California, Germany and Denmark.

The newly elected state Labor government came into power with a policy for 50 per cent renewable energy by 2030. That may have sounded radical at the time, but in the context of the upcoming climate talks in Paris, and the pledges being made at a global, national and sub-national level, it now seems less so.

But that’s not to underestimate the challenge of what it proposes. If the Labor government holds true to that promise, that will require around 25,000GWh of renewable energy by that time, or the construction of up to 7,000MW of renewable energy capacity in just 15 years.

Much of that capacity will likely come in the form of solar energy – both on the rooftops of homes and businesses, and in large utility-scale ground mounted arrays. It could include some of the biggest and most innovative projects in the world: the Sunshine State may just emerge as Australia’s principal Solar State.

It will also include some large wind energy projects – a sector that has by-passed the state in the recent renewable energy surge across Australia. And it will likely include some biomass and other innovative projects too.

Queensland has been a flash point in the climate and clean energy debate, mostly because of the proposed mega-coal mining projects in the Galilee Basin, and the massive infrastructure in rail and port infrastructure, and its potential on the Great Barrier Reef. It is also home to several huge liquefied natural gas projects.

But if Paris gives the investment signal that is expected towards a rapid decarbonisation of the global economy, then it is in renewable energy that the state may make its mark.

Queensland Energy Minister Mark Bailey, in an interview with RenewEconomy for this special Queensland report, says Labor is still committed to its ambitious renewable energy target, although it is taking a cautious approach.

Within a few weeks, Bailey says he expects to name an expert panel to provide advice on how it should reach its target.

“The Palaszczuk Government has set a priority of unlocking the state’s renewable energy resource potential and establishing Queensland as a renewable energy leader,” Bailey says. (Read the full interview here).

One of his first priorities will be unlocking the potential of large scale solar, virtually ignored in the state up to now. And the state plans, at least in the short term, to follow the example of the ACT and use a reverse auction process to get some projects underway. Plans for a 60MW auction are already being put in place.

“We have certainly seen the successes of the ACT auctions and are keen to replicate that and go further,” Bailey says.  “Queensland is a big state with some of the best solar resources in the world, and is ideally placed to benefit as solar generation becomes an increasingly important part of Australia’s electricity generation.

“We have been out of the picture for large scale solar under the previous (Newman-led LNP) government and we have been rectifying that.”

Bailey has also established a new Queensland-based Productivity Commission to investigate, among other things, a “fair price” on solar.

As Bailey notes, and the solar industry has been pointing out for several years, most regulatory assessments on a fair price of solar focus on the “costs” of rooftop solar, but not its benefits – either to lowering wholesale prices, deferring or reducing peak loads, or its environmental credentials.

“This is a topic that has been examined many times – but not with an effort to explicitly include those broader benefits,” Bailey says.

About two thirds of solar households in the state benefit from the premium feed in tariffs that will last until 2028, but the review of solar tariffs (payment for exports to the grid) for other users, and those yet to add solar, is seen as crucial – not just for the progress of rooftop solar in the state, but also for battery storage, and most likely the business models of the state-owned network operators.

Queensland is already a state of records. It hosts the biggest amount in aggregate terms of rooftop solar in the country – a total of more than 1.45GW. Within a year, it will mean that rooftop solar will overtake the Stanwell and Tarong coal fired power stations as the large generator in the state.

And if the dreams of developers come to fruition, Queensland is likely to hold some other records:

It could play host to the largest combined wind and solar hybrid plant in the world. The Kennedy wind park, its promoters Widnlab and Japan’s Eurus say, could total 1,200MW, and be able to supply “base load” energy to meet nearly all the requirements of north Queensland.

It could play host to the biggest combined pumped hydro and utility scale solar plant in the world. Genex intends to turn a disused gold mine, Kidston, into a 300MW pumped hydro plant, topped with a 150MW solar system on its old tailings site.

It could also play host to the largest solar plant in the world. Solar Choice, with its partner SunEdison, is looking to build a 2GW solar plant in the south of the state, although it will certainly be build in stages.

Ergon Energy, the state owned utility, can lay claim to being the biggest grid with the lowest population density in the world. It covers 97 per cent of the state and has on average 4 customers per kilometre. That provides massive challenges, and huge opportunities, both in innovation and in grid transformation.

As Ergon CEO Ian McLeod says in an interview (and you can read more of that here) that if the network operator were to start over, it would take a different take, focusing on the new technologies of the day – and that would mean fewer poles and wires, and less redundancy in the system.

“Today, we would look at hybrid, storage and renewable options, perhaps with some back-up,” McLeod says. Ultimately that would result in a cheaper grid than has already been built. The big task is how to effect the transition, considering that the grid has already been built.

“We have to apply the technology where it makes sense and integrate the new technology into the extremities of the network, pull back from the edges, use storage, tariffs and price signals to reduce our spend on network augmentation by sharing and increasing utilisation of available resources,” McLeod says.

There are a couple of reasons why Queensland may be able to achieve this transformation and accommodate this massive investment in renewable energy.

The first is that it has excellent solar resources, which are barely untapped at utility scale.

Despite being the country leader in rooftop solar, there is little in the way of utility scale solar built to date – although the government’s 60MW solar auction, the 150MW of capacity auction by Ergon Energy, and the tender being conducted by ARENA could change that.

There are reasons for the industry to be positive about solar in Queensland. Because of its booming LNG industry, Queensland is the only state forecast to have increased demand and possibly the need for new generation over the next decade.

An analysis by Bloomberg New Energy Finance suggested that the price of renewable energy certificates to make solar work in Queensland may be significantly lower than for wind energy in other states.
tesla windy hill

The state also has a largely untapped wind resource: its only wind farm to date is the 12MW Windy Hill wind farm (pictured here charging up a Tesla Model S). But there are plenty of other projects in the pipeline.

It also has a largely untapped resource of potential bio-mass generation, as well as the hydro opportunities identified by the likes of Genex. And ironically, due to the massive demands of the huge LNG export plants coming on line, it is the only state in Australia with a profile of increased demand, rather than falling or static demand.

This is part of a series of articles on Queensland sponsored by Norton Rose Fulbright. For the others in the series, please click here. and also visit Norton Rose Fulbright’s COP21 coverage.  

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  • GlennM

    Hi Giles..
    Not being an Aussie, but very interested. Now that Tasmania is mainly renewable, ACT heading that way and with the announcements from SA and Queensland. Then Where as a country will Aus be ??. Does this mean the “23% should be plenty” is now toast of is the Federal Govt still killing the change?

    • Andrew Thaler

      Lots of renewable electricity… but SFA renewable ‘energy’. our geographical size means we need to develop alternative liquid fuels.. but there is not really much progress to report on in this area. We still have our heads in the sand when we fill up our cars/trains/trucks/busses/ships/standby-generators etc with petrol and diesel

  • Cooma Doug

    Things are on the move Giles. This is not just left wing optimism you are highlighting.

    • Andrew Thaler

      no, but it is a large glob of ‘populist politicks’.. we await the actual outcomes but shall not hold our breath.

  • John Saint-Smith

    How ironic, is the Sunshine State finally going to live up to its name?
    I dare not hope.

    • John McKeon

      Please do hope, John. It’s good for you and me!

  • Ian

    Don’t you love double edged remarks. Mr Ian McLeod of Ergon is good. ( at the political art of irony, that is)Here are some translations, if you hadn’t noticed the innuendos.

    ‘ integrate the new technologies into the extremities of the network, pull back from the edges’ means use solar and storage in remote communities and at remote rural consumers locales, either as a cost savings venture to limit long lines of peak electricity supply or as a means to divest and get rid of rural electricity supply responsibilities.

    ‘Use storage, tariff and price signals’ means use tariff structures to influence the electricity market such as increasing fixed network fees to discourage solar uptake or peak capacity fees to force solar customers to install storage or discourage new solar customers.

    As electricity customers we need a little more than rhetoric to buy back our good will after the networks behaviour of the last few years. Whether the networks can transition to an ‘internet’ of distributed electricity supply and demand or continue as a monopolistic, monolithic and paternalistic centralised supplier of electricity remains to be seen.

    • Ian

      Here is a concept that may be useful in this war on fossil fuels. Solar sacrifice. In order to affect change for the better people need to give up something. Donating to charity, a soldiers sacrifice in war, a parent’s sleepless nights or funding their child’s education. Well, a solar sacrifice is exporting as much solar power to the network as one can, not expecting any equitable remuneration. This is how it works: for every KWH exported to the grid this reduces the market for fossil fuel energy by 1 KWH. Coal powered stations need to run continuously to be economical, by taking away a third of their market share in the daytime, the cost of the remaining useful power goes up by 50 %. This effect is magnified by the timing of solar generation which is at the traditional peak demand period in the middle of the day when prices,(at a time before renewables), were highest.

      Don’t complain about the low export tariff, be happy and export as much as you can because your sacrifice will influence the closure of coal generators.

      • John McKeon

        “Don’t complain about the low export tariff, be happy and export as much as you can because your sacrifice will influence the closure of coal generators.”

        Right on, Ian!!

        “Queensland is already a state of records. It hosts the biggest amount in aggregate terms of rooftop solar in the country – a total of more than 1.45GW. Within a year, it will mean that rooftop solar will overtake the Stanwell and Tarong coal fired power stations as the large generator in the state.”

        And I’m very proud to be making my 5kW quantum of contribution.

        Bring.It.On. IT’S TIME!!!!!!!!!!

      • John McKeon

        And by the way I would personally drive a stake through the heart of the proposed Adani mine “development”.

      • MaxG

        The problem is, the networks won’t let you export as much as you can. I have a 12kW array with 2 x 5kW inverters. Basically only one feeds 5kW… and only after getting an exception from Energex, otherwise it would have been zero export. — The point is,you can’t win against these bastards.

  • Peter

    Queenslanders will start to believe it when it happens. Labor is full of big talkers who are meek on action. Let’s wait and see what eventuates when they sit down with the big producers.

    • TechinBris

      I guess that is far better than what we had in Government before this lot, which was full of big Liars and big on action for the big end of town to do mostly what it wanted against the Plebs.
      Queensland Plebs were dismayed as how they were so betrayed by the Markets and a rabid MSM, which then delivered Govermental decrees to them, shocked realisations of veiled hints to them, with their own Judicial system, which was being manipulated and convoluting upon itself, should they so turned any attention onto any of us, who caused them bother.
      You will always get a portion of people in our Communities, who are closet masochists for hard treatment of themselves, but to terrorise your Community’s less fortunate, most vulnerable citizens with impunity, is brutal bullying at its worse.

  • CrankyFranky

    is my birth state finally going to get beyond ‘too hot to think’ and actually put some of that sunshine to work ? – great

    time we climbed out of Tony Abbot’s dark hole (I resisted the prefix beginning with A), leave his coal black heart behind – and move towards the light – yay – let’s do it – free at last !!!

  • Redmarkoz

    Making the installation of solar power panels in all new private housing a mandatory requirement in the Australian building code of standards would be an obvious first step. Such a basic yet progressive policy change would provide every household with reduced energy costs through a greater measure of sustainable self sufficiency and independence from providers reliant on fossil fuels. Embracing such a forward looking initiative would be a logically sound decision in several respects, helping ease environmental and climate pressures while providing economic benefit from an individual to the national level.