ARENA funds 4.5MW solar farm to test network benefits in Queensland

The Australian Renewable Energy Agency is to fund most of the costs of a new 4.5MW solar farm in remote Queensland, in an effort to help establish the “network benefits” of having large-scale solar farms built across the grid.

The solar farm – to be built by Canadian Solar and Scouller Energy – will be located at Normanton, in the north-west of the state, which currently relies on coal-fired power that is generated more than 1,000km away in Rockhampton on the east coast.

This, says ARENA, causes significant losses as the power is transmitted across the network, and building solar farms could make the electricity supply more reliable, and cost effective.

“Adding renewable energy generation closer to where it’s needed can provide more reliable and efficient power,” says ARENA CEO Ivor Frischknecht. “This is a key ARENA investment focus for fringe-of-grid and network constrained areas.”

ARENA is putting in $8.4 million out of the $13.9 million project costs, which it sees as appropriate considering the scale of the project and the pricing and revenue risks involved.

Frischknecht said the results from the Normanton solar farm would allow energy distribution businesses to consider whether it’s feasible to compensate large-scale solar plants for the network benefits they provide, including the deferral of upgrades.

Currently, the regulations do not easily allow for this benefit to be recognised in tariff structures.

“Normanton Solar Farm will act as a test case for network provider Ergon Energy to understand the true impact on network losses,” Frischknect said. “This will provide a starting point to explore regulatory changes that would support more renewable energy installations in fringe-of-grid locations across Australia.”

Normanton Solar Farm will be jointly owned by Canadian Solar and Scouller Energy. Canadian Solar Australia has been contracted to construct the solar plant. Ergon Energy has signed a power purchase agreement to buy electricity from the plant.

“This could make large-scale solar plants more competitive and encourage more project developments, potentially increasing solar uptake and benefiting local communities where these projects can positively impact on the grid.”

Canadian Solar said the project would be an important step for the company, both in edge-of-grid projects and for large-scale solar farms elsewhere in the project. The solar farm will be rated 5MW D/C (how much is produced on site), and 4.5MW A/C (how much is fed into the grid).

Canadian has two projects – the Longreach and Oakey solar farms in Queensland – shortlisted in ARENA’s large-scale tender, and has several other major projects in the pipeline following its purchase of Recurrent Energy’s Australian portfolio.

Scouller Energy has been working on the Normanton project for several years. Canadian was brought in and will provide its solar technology and act as constructor, meeting most of the balance of costs of the construction, along with Outback Solar Power, which also has an equity position in the project.

Normanton Solar Farm is scheduled for completion in December 2016. You can read more about it on the ARENA website.