ARENA announces large scale solar grant winners, 480MW in total

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The Australian Renewable Energy Agency today announced the 12 large scale projects that won grants in what could be the agency’s last major funding round if most of its remaining monies are stripped by the Coalition and Labor parties.

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The Australian Renewable Energy Agency today announced the 12 large scale projects that won grants in what could be the agency’s last major funding round if most of its remaining monies are stripped by the Coalition and Labor parties.

ARENA shortlisted 20 projects for its $100 million large scale funding round, which was expected to support around 200MW of large scale solar. However, because the competitive tender process achieved such dramatic cost reductions, 12 projects with 480MW were awarded a total of $92 million in grants.

As accurately predicted by RenewEconomy on Wednesday, Infigen Energy, Canadian Solar, Solar Choice and Neoen did well in the tender, and – also as we predicted – the Emu Downs solar plant, the Genex solar-hydro project and the biggest project in the tender, Origin Energy’s Darling Downs, were also selected.

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Other winners included the Collinsville power station, which replaces a closed coal-fired generator, and the White Rock solar farm, which will be paired with the 175MW wind farm on the same location.

French group Neoen did best, winning grants for all three of its shortlisted projects, all of which are in western NSW. It adds to the 300MW Hornsdale wind farm it is building after winning contracts with the ACT government. Canadian Solar won with both its projects in Queensland.

Infigen Energy will also push into large scale solar for the first time, winning a grant for its 42.5MW Manildra solar farm in NSW, which will feature First Solar thin film solar technology and single axis tracking. Nine of the 12 projects will eventually feature tracking technology.

All told, there were six projects in Queensland, whose government offered to provide purchase agreements for 150MW of capacity, up from 120MW and 40MW originally, and five in NSW, where the government offered a similar though smaller deal.

One project was in WA but none in Victoria (despite some 11th hour lobbying from the government) and none in South Australia, although the one shortlisted project there insists it will still go ahead to build the world’s biggest solar and storage facility.

Genex said it expects to begin construction of its 50MW solar project, located in an old mine, within the next few months after securing a 20 year power purchase agreement with the state government. It will then add another stage, which will take it to 150MW and then hydro – using the pit of the old mine.

arena solar winners

ARENA CEO Ivor Frischknecht said the funding round is expected to unlock almost $1 billion of commercial investment and boost regional Australian economies. Many analysts think it will also trigger other solar developments, which have been awaiting the outcome of the tender, but see the economics of solar coming down quickly.

The average funding required for the projects was just 19c a watt, which was below the 28c/watt revealed in June and the $1.60 a watt needed to build Australia’s first big solar projects. Project costs have fallen 40 per cent since the start of the process.

“This is a very big deal,” Frischknecht said at the media event. “I would never have thought that the cost of solar could fall so far, and so fast.

“We have some of the best solar resources in the world and lead rooftop solar. But Australia has been lagging in large-scale solar deployment. That’s going to change over the next 12 months as a result of ARENA’s large scale solar round.

“We are going to see a massive renewable infrastructure build that will boost jobs and skills in regional Australia. Regional economies will benefit massively from the growing big solar industry, with 2,300 direct jobs and thousands more indirect jobs expected to be created by this round.

“It is now up to successful companies to deliver these projects in line with ARENA’s requirements, which could see all plants built by the end of next year. This is an aggressive timetable to lock in financing, off take arrangements, connection agreements and required approvals.”

Frischknecht said several of the projects are also seeking debt financing for projects through the Clean Energy Finance Corporation’s complementary large-scale solar program.

Frischknecht also defended the role of ARENA, which risks losing most of its remaining funding because of proposed cuts by the Coalition, and a refusal by Labor to continue defending the agency it established in 2012.

Frischknecht said ARENA had been a driving force in bringing down costs and accelerating the commerciality of large-scale solar in Australia.

“As a result of our efforts, the ARENA funding ask for big solar projects has dropped significantly from half of total project costs to just 10 per cent on average. This means that every dollar of ARENA funding is leveraging $10 from other sources in this round.

In his speech, he added: “We are witnessing a rising confidence in large-scale solar technology, a more supportive market for power purchase agreements, more competitive financing, stronger local supply chains and lower construction costs.

“And while I don’t think ARENA is solely responsible for all of that, I do know that it would not have happened nearly as quickly without ARENA.”

He said the competitive tender approach could be adopted to speed up the commercialisation of other renewable energy technologies, such as battery storage, concentrating solar thermal and bioenergy.

“ARENA is not just focused on building more solar. We want to bring down costs faster, fuel growth in Australia’s industry and give the next tranche of projects a head start.

“Australia’s big solar revolution is tantalisingly close and, as more home-grown businesses step up to provide construction, engineering and financial services, this newest tranche of ARENA-supported projects is well positioned to take the sector even closer to commerciality.”

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32 Comments
  1. Eb 3 years ago

    An excellent result, well done to all involved. Though disappointed that ARENA did not release the figures for MW DC and the first year’s forecast kWh / kW DC / year as well as giving a reason for not committing the full $100m on offer.

  2. Andrew Thaler 3 years ago

    why does ARENA give multiple awards to the same companies. I reckon there is too much politics involved in the ‘choosing’ of the ‘winners’.
    I have no problem with ARENA being stripped of the rest of ‘its’ money.

    • Simo 3 years ago

      ARENA awarded grants to the projects that offered best value for money, so companies like Neoen and Canadian Solar that had a number of very competitive projects naturally got funding for more than one project. Would you really suggest giving money to less competitive projects just to spread it around? As it stands, we have 9 different companies receiving funding. I’d say that’s a great result. Long live ARENA!

    • Farmer Dave 3 years ago

      Andrew, I know how much you have done without support from ARENA and your understandable focus on solar. However, I absolutely do not agree with funds being stripped from ARENA. The sector I am most interested in, bio-energy, needs support to improve technology and to overcome barriers to commercialization. As an example of the latter, consider the use of wood pellets as a convenient, clean-burning renewable fuel. Most of the discussion on RenewEconomy is about renewable electricity, but electricity is about one-third of our total energy use. Heat is about another third, and so we need renewable heat if we are to phase out fossil fuels.

      Wood pellets are an established technology for turning wood waste into a renewable fuel, but there is a “chicken and egg” problem: end-users are reluctant to invest in the technology to use bulk delivered pellets in the absence of a supply, and manufacturers are reluctant to invest in equipment to manufacture and deliver bulk pellets in the absence of a demand. This is exactly the kind of commercialization barrier that ARENA exists to address, and for that they need the funds that Parliament gave them when they were established.

      • solarguy 3 years ago

        Bio gas would be a better RE source for heat and electricity, it’s in abundance, burns cleaner and solves a very dirty environmental problem.

        • Farmer Dave 3 years ago

          Solarguy, do you have a reference for biogas being in abundance, particularly here in Tasmania? We know that wood processing wastes are in abundance here, but I have no data on biogas here. Incidentally, I don’t favour the use of wood for electricity generation, unless it is in the context of a co-generation setup. We have increasing implementation of RE solutions for electricity generation already: solar, wind and hydro. We are not in such a position for renewable heat.

    • Kenshō 3 years ago

      It would be so much better if ARENA make decisions based upon the principle of the triple bottom line – Economic, Environmental and Social Justice outcomes. I’m uncertain if Australian Ethical Investment (AEI) led in the adoption of this principle, though they certainly have been leading Australia since 1986. Perhaps ARENA need lean on AEI for lessons in governance, like so many other organisations have in the last three decades.

    • Charles 3 years ago

      If a company is planning to build multiple plants in different geographic areas, wouldn’t this be better than building one giant plant in one area? (Spreads the increased generation around different parts of the network?) If they were forced to propose one single large site then it would not be in the best interests of the network.

    • solarguy 3 years ago

      And what mechanism do think should replace it that won’t have political interference ?

  3. Robin_Harrison 3 years ago

    ARENA wouldn’t be needed if we removed the massive subsidies enjoyed by the fossil fool industries. Can’t see the coalition or labor doing that. Neither would want to disappoint their paymasters.

  4. Ren Stimpy 3 years ago

    So many pluses about this but up near the top of the list would be the number of regional jobs, both direct and indirect, this will create. If this round achieves its intended outcome of reducing the price of solar in Australia, the next round of projects will be that much larger again, creating even more jobs next time.

  5. Kenshō 3 years ago

    I imagine none of the inverters will be suitable for adding storage and all will either need to be replaced or have inverter/chargers coupled into the systems at a later date. If there are any utility level financial analysts reading, what is the % of the project cost that goes to the inverters?

    • Charles 3 years ago

      I don’t expect a large scale solar plant would even need storage. It doesn’t use any energy itself – just sends all energy generated to the grid.

      • Kenshō 3 years ago

        What’s going to supply the power when:
        a) the sun isn’t shining and the wind isn’t blowing?
        b) fossil fuel generators are powering up and down?
        c) interconnectors are being repaired?
        d) gas generators refuse to come online?
        e) spikes in network demand need addressing without introducing unnecessary network upgrades?
        f) fossil fuel generators are struggling, resulting in frequency being in danger of falling and hence governments needing to buy expensive FCAS services?

        What happens is the inverter/chargers get their power from batteries and as electrons are very fast, the inverter/chargers have an almost spontaneous ramp up of their power output in times of need in milliseconds. They provide the ability to manage multiple RE generators. RE/storage is the next transition, the hallmark of any distributed grid. Grid-connect inverters typically need to synchronise with a grid, so if the fossil fuel generators go down, probably all that renewable energy does also. On the other hand, the inverter/charger synchronises with the larger grid when fossil fuel generators are online or can stand alone on the network when fossil fuel generators go down in outages. This is how stable microgrids have been built from inverter/chargers and batteries in the past.

        • Charles 3 years ago

          I never said there wouldn’t be battery storage elsewhere on the grid – just that there wouldn’t be any at the solar plant itself.

          The rest of your comment looks like a generic anti-renewables rant.

          • Kenshō 3 years ago

            One purpose of an inverter/charger is to invert (produce AC) when power is needed and charge batteries when those demand spikes reduce. What I’m hearing is you either don’t have solar or have a grid-connect system. This means when fossil fuel generators go down so does your system. If you had an inverter/charger, your system would remain up and running during grid outages. My solar system was installed post FIT’s and hence has an inverter/charger. I suggest you stay on topic. The inverter/charger is an integrated computer controlled power management system.

          • Charles 3 years ago

            I have two solar PV systems on my house so I’m aware of what an inverter does. I’m also in Tasmania so your comments about fossil fuel generators are irrelevant. Yes, a house with solar, but without battery storage, will go offline if the grid connection is cut, but this has nothing to do with how the grid power is generated (it could be solar, hydro, coal), and also has nothing to do with your FIT arrangement.

          • Kenshō 3 years ago

            The kit functions best as an integrated unit – inverter/charger. Once upon a time I would go into a long list of advantages, though I found others were not interested. So what’s happening with your FIT? Are you considering storage and hence adding an inverter/charger to your system/s?

          • Charles 3 years ago

            The FIT I’m on now is 1:1 (about 28c), at the end of 2018 it drops back to 5.5c. So I’ll be looking to add battery storage around that time. Hopefully the market has settled down a bit by that stage.

          • Kenshō 3 years ago

            The management device of the storage and whether it’s included in the storage is often mentioned in an offhand way, yet the device that does the managing is the next most expensive component in the system after the battery. The device that does the managing of the battery can also perhaps manage – multiple AC sources like wind, grid, diesel and it can sometimes do load management behind the meter. So the main consideration in adding storage is the type of property and what applications you wish to run and this determines the inverter/charger or storage device manager that is selected. IMHO then the storage is chosen to suit that. Everyone just talks about adding storage cause it sounds simple and easy. The inverter/charger is the brains of the whole system and hence its central in the decision for what system to install not merely $/kWh’s of batteries.

          • Kenshō 3 years ago

            ARENA has done a great job adding so much renewable energy to our grid at such a cost effective outcome. Like grid-connect households, Australia is being proactive to get renewable energy on the grid. At the moment the amount of renewable energy on the grid is relatively small, and so the amount of intermittent energy that inverters are placing on their outputs is relatively small, however in decades to come this may become a problem, with the network needing to buy frequency stability services. Just like grid-connect households are going through a transition to slowly add storage to PV, our grid will slowly go through the same transition to transition to integrated RE/storage. This transition will be more expensive in the short term because the cost of an inverter/charger is three times that of a cheaper grid-connect inverter, however the long term outcome will pave the way for a truly distributed grid, with miniature computer controlled and distributed power stations across our grid, able to offer responses to outages on other parts of the network, able to provide power when fossil fuel generators are powering up and down and more deployable on both a larger and smaller scale throughout more targeted locations in the country. With your household, your in the ideal position to have the time to evaluate both the $/kWh of the coming storage revolution, as well as exactly what type of inverter/charger system you wish to manage your property.

          • Kenshō 3 years ago

            Solar array DC to AC = inverter (for the house and grid)
            AC to DC = charger (grid power to batteries)

            So as well as a regular grid-connect inverter not being able to charge batteries in winter, it can’t manage a battery at all. So the inverter/charger is the computer we programme to coordinate when we want the property running off the batteries or conversely running off the grid and charging the batteries.

            On a utility level grid, the purpose of the inverter/charger is to “invert” from DC to AC when the grid has a shortfall of peak power, and conversely to “charge” from grid AC to battery DC when those peak loads have subsided. In other words is gives power in peaks and takes it back in troughs. In so doing it helps out fossil fuel generators by acting as a frequency stabiliser and can supply a grid if it would otherwise have had an outage or market manipulated spikes in electricity prices.

          • DJR96 3 years ago

            My sentiments too Kensho.

            All these large scale solar farm projects aren’t anything new or progressive. They will generate plenty of power but not necessarily at times when the grid needs it most. Hence the need for storage as you point out. Furthermore, they’re projects that would likely be possible even without funding from ARENA.

            So for the next competitive round, I hope ARENA will only consider funding projects that include significant storage capacities.

            We’ve seen the cost of PV come down to well under $1/Watt, now we need the same to happen for storage. This will also drive development of more hybrid inverter models too.

            Only then will we all be on the road to the future energy model that is inevitably coming. I don’t see much point wasting time and resources on half measures. Bring it on!

          • Kenshō 3 years ago

            That’s what I wanted to say though I didn’t seem to get to the point. Good big picture summary DJR96.

      • Analitik 3 years ago

        Just like wind farms? Great – more volatility.

        Kenshō is correct in that solar generators should provide some storage to buffer their output. I feel all existing utility renewable generators should too – if each had about half an hour of storage for their rated output, pricing volatility in SA would disappear.

  6. Tim Buckley 3 years ago

    An excellent result – congrats to ARENA – and may the Federal government see the light. Unlikely, so lets hope that our State governments see the boost to investment and jobs in regional centres and continue to push for a more aggressive electricity sector transformation. Its going to happen regardless, better Australia does it in a timely way that promotes logical investment and learns from the process first hand rather than sitting on the sidelines while China, Japan, India, Chile, Brazil, Peru, America, Canada, Germany, Norway etc all get on with it.

  7. Kenshō 3 years ago

    Is the reason South Australia didn’t get any money from ARENA because SA needs to primarily add stability and hence RE/storage to its grid? In this way, perhaps SA’s grid has characteristics that all grids will need to address in the coming years as fossil fuel generators are phased out. It’s very surprising that Lyon didn’t get any funding for its RE/storage project in SA.

  8. Cooma Doug 3 years ago

    Looking at this and into the future I can see considerable ecconomic advantage that isnt easy to quantify.
    In years gone by 500 mw would be one coal generator somewhere needing a lot more transmission infrastructure. Also the threat of loosing 500 mw instantly with the coal gen is not there.
    I guess the solar on the roof eliminates the most cost in these not so easy to see requirements. These issues worth a lot more then the free fuel comparison.

  9. Kenshō 3 years ago

    How’s this for a theory? If we do a research study of solar systems ARENA staff currently have, we find there’s a high correlation between the type of system they have on their homes and those they’ve put on our grid/s??? The reason I have this theory, is human beings rarely make objective decisions. If they had experienced the benefits of an inverter/charger, it would appear unlikely they would ever wish to go backwards to a far less capable system. Is there a single person in the community with an inverter/charger who would go back to a grid-connect style inverter???

  10. Kenshō 3 years ago

    What I’d really like to know is: If the fossil fuel generator in the local area has an outage, does the utility level solar system stop generating power???

  11. Kenshō 3 years ago

    Fantastic cost effective additions to Australia’s renewable energy response. Well done all those people in ARENA who have lowered the cost of large scale solar and generated an amazing outcome in leveraging taxpayers money like no other organisation in our economy could.

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