Another solar farm starts up in Queensland as daytime prices stuck near zero

The second stage of the Oakey Solar Farm in Queensland has started sending power to the national grid, west of Toowoomba, becoming the latest solar farm to join a grid already experiencing lengthy day-time periods with the wholesale price stuck at or below zero.

As you can see in the graph below, supplied by Paul McArdle from Global Roam, the providers of our popular NEM-Watch widget, the 55MW Oakey 2 made a small start to production over the weekend, reaching output levels of around 10MW.

The project comes online almost exactly six months after the 25MW first stage of the 80MW project itself began sending power to the grid. It will be expected to negotiate its way trough various “hold points” to satisfy the market operator it is performing according to specifications before reaching its full output,

Both stages of the project have run behind schedule, partly due to fallout from the failure of solar engineering group RCR Tomlinson, and possibly also due to hail damage from severe storms in south-east Queensland which is believed to have hit the second stage in particular.

The new solar plant comes on line as Queensland wholesale electricity prices hit zero and below zero for much of the past month, partly because of the growing output of both rooftop and utility scale solar, lower demand in the relatively mild season, and the reluctance of most coal plants to ramp down output.

Two weeks ago, the prices fell to near the market floor when a network constraint limited exports to NSW, forcing most large scale solar plants to switch off for varying periods, and raising questions as to why the coal generators increased production at the same time, and why the biggest pumped hydro facility in the state did not “charge its batteries” when it could have been paid to do so.

The negative prices have been affecting other states too, mostly South Australia, where the Tailem Bend solar farm again switched off for long periods on Sunday – as it is required to do under its off take agreement when prices remain below zero for much of the day-time hours.

The Clean Energy Finance Corporation has backed both stages of construction of Oakey, with $55 million in debt finance helping to bring Oakey 2 to financial close in January 2018. Oakey 1 had a power purchase agreement with the Queensland state government, but the second stage has not announced any PPA.

Combined, the 80MW of capacity is expected to generate around 138,800MWh a year; enough to power the equivalent of 24,000 Queensland homes. The solar farms are owned by UK-based Foresight Group.

The battery-ready Oakey 2 will also incorporate five-minute forecasting technology, which will assist the Australian Energy Market Operator (AEMO) enhance grid stability.