Australia opens largest solar farm, but solar future clouded

The first utility-scale solar farm to be built in Australia’s National Electricity Market – and the largest so far in Australia – was officially opened on Wednesday. But the celebrations were muted by concerns about the industry’s future.

The 20MW Royalla solar farm – about 17km south of Canberra – is the first project to be completed under the innovative reverse auction program launched by the ACT to meet its 90 per cent renewable energy target by 2020.

“ACT’s renewable energy program is a great example of what can be done with thoughtful regulation,” said Rafael Benjumea, the CEO of Spanish project developer FRV. “It is bringing leading global companies to ACT with competitive prices.”

FRV, which will also build a 56MW solar farm in Moree, the first big solar farm to have solar tracking, warned that the future of solar was clouded by the RET Review panel’s report and “extreme” views about renewable energy in Australia.

Royalla is expected to be followed by two other solar farms in the ACT under the auction program. A 153MW project spread between Nyngan and Broken Hill is being built by First Solar under the now defunct Solar Flagships program, and the 56MW single axis tracking solar farm is to be built by FRV in Moree.

Analysts forecast that another 3,000MW of large-scale solar could be built in Australia – and there are plenty of projects in the pipeline – but none are likely to go ahead if the federal government scraps or dilutes the renewable energy target. In that case, new solar farms are unlikely to appear until the mid 2020s, when coal-fired power stations retire and solar competes against new build coal-fired generators, rather than fully depreciated plants built by cheap government finance.

In an interview with RenewEconomy – read it in full here – Benjumea said solar was cheaper than new-build coal, but Australia was at risk of losing international investment.

“Investors in such a capital-intensive industry as ours fear uncertainty, and this review, unlike past reviews, has meant that Australia is far less attractive as an investment destination,” Benjumea said.

“We are surprised at the extreme views that have emerged within Australia in areas such as renewable energy and we hope that a sensible outcome will be found from the current review of the Target that will encourage continued deployment of renewable energy.”

ACT Energy Minister Simon Corbell, who has pushed the auction program that will ultimately see more than 500MW of wind, solar and storage facilities in and around the ACT, said the Royalla plant’s opening was a significant development for Australia.

“It really does  demonstrate that a large scale, reverse auction feed in tariff process can deliver large scale solar at an affordable price and  in a very timely manner,” Corbell told RenewEconomy in an interview.

“For Australia, it highlights what can be achieved with certainty, and with clear policy leadership, and it highlights that companies are willing to invest when they have that certainty of a supportive policy environment.”

The Royalla Solar Farm will generate enough energy to power nearly 4,500 Canberra homes, while abating nearly 2.1 million pounds of carbon pollution each year. FRV won the Power Purchase Agreement for the project in a competitive tender process last year.

The project is constructed over nearly 50 hectares and is the largest operating solar facility in the country. It comprises 83,000 panels.