UK steel billionaire Sanjeev Gupta has officially launched his plans to build more than 1 gigawatt (1,000MW) of dispatchable renewable energy at a ground-breaking ceremony for the first of those projects – the 280MW Cultana solar project near Whyalla.
Gupta was joined by South Australia Premier Steven Marshall and Whyalla mayor Lyn Breuer for the ceremony, where Gupta reinforced his goal to expand Australia’s manufacturing and heavy industry around a supply of cheap and reliable renewable energy.
The contrast with the policy debate in Canberra, where the Coalition on Tuesday endorsed a National Energy Guarantee policy designed to ensure no new renewable energy is built over most of the next decade, could not have been more marked.
“Today’s event is symbolic of our desire to develop and invest in new‐generation energy assets that will bring down Australia’s electricity prices to competitive levels again, as well as our commitment to local and regional Australia,” Gupta said in a statement released before the ceremony.
“In particular, this signals the beginning of our journey with a number of stakeholders to not only transform GFG’s operations in Whyalla, but also further enhance the appeal of this great city.”
Gupta bought the Whyalla steelworks and other OneSteel assets in the eastern states late last year, and immediately announced his plans to transform the business by building and contracting large-scale solar and energy storage, even highlighting plans to build as much as 10GW across Australia to create a “solar-based” economy.
Already, he has signed a contract to power much of the Laverton steelworks with a new solar farm in Victoria, and several other contracts to supply other major energy users in South Australia.
The Cultana solar farm, which is due to begin formal construction early next year, is the first of a number of projects planned for the area,.
These include a second stage of the solar farm, what would be the world’s biggest lithium-ion battery (120MW/140MWh), a major pumped hydro project in dis-used iron ore mines in the nearby Middleback Ranges, and co-generation at the steelworks themselves.
Gupta’s plan to power the steelworks in South Australia, Victoria and NSW – and the new solar farm built by Queensland zinc refiner Sun Metals – contrasts with the position of other manufacturers like Bluescope and Tomago, who insist that renewables could only play a minor role in their power supply, and that they need new “baseload.”
Marshall, elected in March after spending years criticising the previous Labor government’s support for renewable energy, including its latest target of 75 per cent renewables by 2025, is now likely to see his state reach that target by 2020, thanks to projects like Gupta’s.
That, at least, is the assessment of the Australian Energy Market Operator, and is confirmed in the modelling for the NEG – even if the Energy Security Board is trying to convince people that investment will come to a sudden halt after that across the country.
Gupta’s plans show the insanity of that particular part of the modelling.
The Cultana solar farm will be built by Simec Zen Energy, the company of which Gupta’s GFG Alliance now holds a 51 per cent stake.
It will produce 600GWh of electricity a year from 780,000 solar panels – enough to power almost 100,000 average homes.
It will compete with the Bungala solar farm, currently completing its first stage of 120MW and now building its second stage 120MW at nearby Port Augusta, for the title of biggest solar farm in the state, indeed the country. Bungala also has a stage-three project with storage in the pipeline.
Gupta says even larger solar projects will follow in other states.
“All of these projects will not only improve reliability and greatly reduce the cost of electricity in our own operations,” he said.
“They will also provide competitive sources of power for other industrial and commercial users, while at the same time playing a key role in the market’s transition towards renewables,”
“We have a strong conviction that traditional carbon-intensive generation sources do not have a long‐term future as the predominant source of power in Australia and globally. We believe the world is undergoing a momentous transition to renewable power as the cost of renewables drops dramatically and quickly.”
Gupta said it was clear that coal and other traditional fossil fuel-based power would continue to play a role in the clean energy transition – meaning they wouldn’t suddenly disappear overnight. But he says he has no doubt that generations to come will be powered mostly by renewable power.
“Looking forward, we will therefore continue to invest in renewables, helping drive their market penetration and continual increase in affordability and reliability,” he said.
“At the same time, we will make use of traditional power sources supporting an orderly transition.”
Mayor Breuer said the council was keen to partner with GFG in the rejuvenation of Whyalla over the coming decades, including leasing a portion of the land for the Cultana project.
“We’ve already seen Sanjeev invest tens of millions improving efficiencies and reducing input costs for his Whyalla operations, this now marks the beginning of his long-term investment program,” Mayor Breuer said in the statement.
“Most importantly for Whyalla, this project signals to the nation that Whyalla is open for development, helping attract industries to our great city and further diversify and strengthen our economy.”
Simec Zen has commenced preliminary consultation discussions with the local community regarding the project, with development approval anticipated in the fourth quarter of this year, and construction commencing in the first quarter of 2019.