Federal energy minister Josh Frydenberg says he will ask the Australian Renewable Energy Agency, the Clean Energy Finance Corporation and the Infrastructure and Project Financing Agency (IPFA) for advice on the government’s promised $110 million equity investment in a solar thermal plant in Port Augusta.
In a statement late Thursday, Frydenberg said he had written to SolarReserve asking for details about the proposal to spend $650 million building a 150MW solar tower plant with molten salt storage near the shuttered coal plants outside of Port Augusta.
“Solar thermal plants operate in a similar way to traditional fossil fuel power plants with steam spinning a conventional turbine, which means they can contribute to network stability and reliability when coupled with built-in storage,” Frydenberg noted.
A contract signed between SolarReserve and the South Australian government promises a price cap of $78/MWh for all the state government’s electricity needs, but the price is dependent on SolarReserve accessing the cheap equity on offer from the federal government.
That offer – made by both mainstream parties in the lead up to the last election – was reinforced in the federal budget by the Turnbull government as part of a tax policy deal with Senator Nick Xenophon.
However, the funds had yet to be allocated to any project. ARENA was tasked with seeking expressions of interest on the solar thermal funding for Port Augusta, but did not call for detailed proposals.
The South Australian government and SolarReserve appear to be assuming that, as the only viable project, it would get access to the funds, but other solar thermal developers have since suggested they want a slice of the action too.
Frydenberg says the three agencies will now consider the details supplied by SolarReserve and provide the government with advice on the project. There was no word on the timing. SolarReserve hopes to begin construction in February, finishing the project in 2020.
“ARENA and the CEFC have a strong track record in supporting the commercialisation of emerging technologies and will use that expertise to take solar thermal to the next level in Australia,” he said in a statement.
The IPFA advises the Federal government on funding and financing solutions for nationally significant infrastructure across all sectors, including energy.