ARENA regional scheme may deliver major boost for large scale PV

Print Friendly, PDF & Email

Large scale solar looking at big boost as ARENA receives proposals worth billions for regional scheme with miners making nearly half of applications.

share
Print Friendly, PDF & Email

Large scale PV projects make up the majority of the 72 expressions of interest (EOIs) that the Australian Renewable Energy Agency has received for its Regional Australia’s Renewables Program – industry stream. ARENA hopes to begin giving the go-ahead to the first of the successful projects under the program by mid year.

ARENA is currently making its way through submissions for its $400 million program to facilitate renewable energy projects in regional Australia. ARENA has revealed that, in total, the applications are worth “billions of dollars” of renewable energy projects.

While solar PV makes up the majority of the applications, almost all involve hybrid solutions, integrating PV or PV plus wind with diesel or gas generation. Some of the applications involve battery storage. Solar thermal projects are also on the table.

Mining companies appear to be aggressively taking up the opportunity presented through the ARENA regional industry program, with 39% of applications coming from the resource industry. The major mining companies active in Australia have all submitted proposals. This, industry observers have noted, could indicate that the floodgates are about to open for a whole-scale adoption of renewables in the supply of resource operations.

The first stage of assessment under the program is for EOIs to be placed with ARENA, with the body deciding which projects it would like to receive a full application for funding from. ARENA CEO Ivor Frischknecht says some applications are well advanced and could be built out in as soon as 12 to 18 months.

“Some of the projects are literally shovel ready, they’ve got all their permits and financing lined up, whereas others are still very early on in the thinking process – whereby there is a project has been identified but it is still more of an idea than a real project ready to be executed,” said Frischknecht.

Through the application process, ARENA’s Frischknecht has learned that for some mining companies this is the first time that they have considered sourcing electricity from renewable energy sources. “One of the applicants told me during the application process, ‘this is the first time we are going through internal approval of a renewable energy project, it’s taken two years to get this far but the next time we go through it’ll happen ten times faster because everyone knows what this is about and why it makes sense,'” said Frischknecht.

Ray Wills, an energy consultant with Duda and Wills, said that with a number of successful renewable energy projects resultant from the ARENA program, renewables could develop significant momentum in the sector.

“I think what we need to see from ARENA is in the order to 10 to 15 projects in WA with mine sites that will get all the engineers talking,” said Wills. “The fact that we’ve had so much interest in the scheme that ARENA will be delivering commerciality with renewable energy  projects to miners with, that is of course really, really important.”

Wills has calculated that a 1 MW PV array can displace around 500,000 litres of diesel annually. Delivering savings of $750,000 per year, the PV payback could be in the order of three to four years. “That’s going to get the attention of the CFO,” said Wills.

While rooftop solar developers may be lamenting the Australian dollar’s drop in value against the Greenback, the Perth-based Wills suggests that the same thing may make mining companies more willing to take risks with what they perceive as unproven renewable energy technology. “As the Aussie dollar falls and revenues increase, miners may very well be prepared, ironically, to take some more commercial risk with some of these new RE technologies, to get them on site as revenues are high.”

Despite all of these positive signals, there still remain fears that ARENA may not be left with sufficient budget to deliver on the scheme. As has been previously observed by Reneweconomy, if the “One Million Solar Roofs” initiative is funded through ARENA, then the body’s ability to follow through with the funding of its own schemes could be compromised.

“ARENA’s funding has already been significantly cut and there is a spectre still hanging over them,” said Sustainable Energy Association’s Kirsten Rose. “So we just hope there is not other programs competing for those funds.”

ARENA expects to receive full applications from projects with successful EOIs in the coming weeks. It’s not unreasonable to think the project evaluation team will be burring the midnight oil to get through them all, before an announcement of “Million Solar Roofs'” funding is announced.

Print Friendly, PDF & Email