Ergon to buy 150MW of renewable capacity for Queensland grid

Queensland looks set to break its large-scale renewable energy drought, with confirmationthat government-owned utility, Ergon Energy, is launching a tender for 150MW of new solar, wind or hydro energy capacity to be added to its regional grid.

Ergon said on Monday it was looking for detailed submissions from companies with “solid reputations” in the renewables industry, who it could partner with to help meet its renewable energy requirements.

Queensland has so far commissioned very little in the way of large-scale renewables, despite being the prospective state for large-scale solar, because of its excellent solar resources, and because it is one of the few growth areas for demand in Australia.

But it seeking proposals for projects from Townsville and Cairns to the north, down the Whitsunday coast and inland to the south west region. It is looking for projects of at least 20MW, and wants them to have council development approvals, or be well down the track of getting those.

Bloomberg New Energy Finance has predicted Queensland could be the epicentre of large scale solar in Australia, because of the excellent resources and demand growth mentioned above. This has been echoed by Origin Energy, which is thought to be canvassing similar proposals.

There are a few big solar projects in the pipeline – including the Solar Choice-SunEdison 2GW Bulli Creek project in the state’s south west, which stands to be the largest in the world if it is ever fully developed – and, with a renewable energy friendly state government now in place, Ergon should be spoiled for choice.

Canberra-based renewable energy development company Windlab is proposing a 1,200MW wind and solar (600MW wind, 600MW solar PV) project for north Queensland, called the Kennedy Energy Park.

And the Australian arm of Spanish renewable energy developer FRV in May revealed plans to build a 150MW grid-connected solar PV farm south of Townsville, which would deliver up to 80 per cent of local electricity demand at rates cheaper than a new coal plant. Canadian Solar also has a 90MW project ready.

Queensland energy minister Mark Bailey said the Ergon reverse auction signalled the beginning of the large-scale renewable energy agenda of the Labor Palaszczuk government, which in May confirmed its commitment to 50 per cent renewables for the state by 2030.

“This simply would not be happening if Ergon Energy was being privatised as planned by the previous LNP government,” Bailey said in a statement on Monday.

“Our focus on public ownership and strong commitments on renewable energy gives confidence to Ergon to take this forward.”

Ergon Energy chief executive Ian McLeod said the move to invest in renewables was a common sense approach.

“Renewable energy sources including rooftop solar are already contributing over 10 per cent of the electricity for our main grid and we expect that growth to continue,” McLeod said.

“Queensland’s sugar industry’s generation of renewable energy is already contributing $45.7 million in economic value to the industry.

“We have a government owner of a retailer committed to renewable energy projects,” he said.

Ergon said companies would be able to download documentation from the company’s website next week, when the Expression of Interest was released.