Ergon Energy, the operator of Queensland’s regional electricity network, is about to tender for up to 200MW of large-scale solar capacity, and is also looking to accelerate its push into battery storage and electric vehicles as part of its plans to transform the country’s biggest grid.
The move by Ergon Energy is the biggest tender for large-scale solar seen in Australia (the country only has 200MW of large-scale capacity built or under construction). It also underlines how the technology – with the help of falling technology costs, some preferential financing support and some political jawboning – is about to take off in Australia, in large arrays and not just on rooftops.
Ergon Energy CEO Ian McLeod told RenewEconomy on Thursday that a formal request for expressions of interest for 150MW of large-scale solar capacity will be issued in the next few weeks. A separate tender for up to 50MW of solar capacity – mostly in the range of 3MW to 10MW – will be conducted to reinforce its “fringe-of-grid” operations.
The tender highlights how Queensland may indeed finally deliver on its sobriquet of the “Sunshine State”. It is seen as Australia’s best prospect for utility-scale solar now – because it is the only state with rising demand, has excellent solar resources and, despite leading the country in the installation of rooftop solar, has installed little in the way of large-scale renewable energy capacity to date.
That could change quickly. The renewable energy target means that Queensland retailers will need to install a lot of capacity to meet its RET obligation, and because the state is the only one in Australia that may end up with a shortfall of generation, it is an opportunity for wind and solar to compete with fossil fuels on costs, such as the massive wind and solar project planned near Townsville that is competing with a proposed coal-fired generator.
Origin Energy is also seeking expressions of interest and pricing from solar module manufacturers for potential large-scale solar projects in Queensland, and McLeod says there are plenty of “shovel-ready” projects ready to be developed.
McLeod did not name them, but they include the 1GW Solar Choice project in south-west Queensland, the 95MW Oakey project now owned by Canadian Solar, a 150MW project in north Queensland owned by FRV, and the 600MW solar project (paired with a 600MW wind project) proposed by Windlab. There are numerous other projects.
Large-scale tenders – or auctions – are common overseas, and becoming increasingly popular in Australia. The ACT government has auctioned 40MW of solar capacity, and plans another 50MW of solar plus storage; the Australian Renewable Energy Agency will tender for up to 200MW of solar, and the Queensland government is also considering a separate tender for 30MW of capacity.
McLeod says Ergon will take the best offer, but given the number of projects and the nature of the network, it would likely spread the tender across a few sites.
This is especially the case for the fringe-of-grid tender, which will seek a number of smaller 3MW-10MW solar installations to reinforce its SWIR network – thin lines at the edge of the network. McLeod says the transmission losses to some western towns, from ferrying electricity from coal-fired power stations 900kms away, were huge.
Local generation, such as solar, made a lot of sense because it avoided losses, and strengthened the grid, particularly in conjunction with battery storage.
On that note, as reported here before, Ergon is installing a series of 100kWh battery storage arrays to boost its network security (it’s cheaper than replacing or upgrading a sub-station).
It is also trialling 10 lithium-ion battery storage devices in homes and businesses in Townsville, and is installing 30 battery storage devices from Sunverge as part of its “Project Sunshine”.
“You will see Ergon do more and more batteries,” McLeod told a workshop at the Clean Energy Summit. He said it was a good investment, cheaper than a newly built or replaced sub-station, and they were mobile. “We have to be able to move those batteries to deal with peak demand he said.
Battery storage will be critical for dealing with peak demand. Developers were looking – and were being encouraged – to install them in new subdivisions, and McLeod predicted that battery storage would be used to meet peak demand instead of expensive, and polluting, peaking gas-fired generators.
McLeod says Ergon is also pushing electric vehicles. The utility is buying a fleet of plug-in hybrid electric vehicles from Mitsubishi. He suggested that on average, daily travel these cars rarely needed to run on their petrol engine.
“Women in particularly don’t like to go to petrol stations. But you don’t need to, he said, given that average daily travel was 30kms a day, and PHEVs could cover that easily.”
McLeod said the Ergon grid, which covers 44 per cent of the area of the National Electricity Market, with just 7 per cent of its customers, was built on old technology, and weighed down by the needs and response to air conditioning, poorly framed tariffs and dominance of centralised generation.
He says it is “extremely inefficient”, but it is evolving, and that included its business model. “We don’t see ourselves as a poles and wires business. We see ourselves as an open platform for variety of applications.”