French energy giant ENGIE, the owner of the soon-to-be-closed 1,500MW Hazelwood brown coal generator in Victoria, has called for proposals for large scale solar projects in Australia.
The tender, revealed in an advertisement placed in RenewEconomy’s daily e-newsletter, circulated to more than 13,000 industry people, calls for proposals to be submitted to the company’s newly-created Engie Renewables Australia division – by February 10.
The push by ENGIE confirms the rapid shift from coal-based power to renewable energy in Australia, and across the world, and the emergence of large scale solar in Australia as it energy costs fall to match those of many wind projects.
Already in the past three weeks, Korean-owned zinc refiner Sun Metals has announced a 100MW solar plant near Townsville to help power a significant refinery expansion, and RenewEconomy also understands another major international renewable energy group is about to announce two 100MW solar projects in Australia and plans for another 1,000MW.
This comes as the 12 projects totalling 480MW awarded grants under the Australian renewable Energy Agency’s big solar program begin construction, and two other significant projects, a 140MW solar plant in Queensland and a 100MW plant in Western Australia get built on a “merchant basis”, meaning the owners are not waiting for a contract and taking advantage of high prices for wholesale electricity and renewable energy certificates (LGCs).
Indeed, there are now nearly 1,000MW of large scale solar projects already scheduled for construction in Australia in 2017.
This figure could well increase significantly over the next few months, given that the likes of Adani, and other former coal generator owners, are also looking to develop projects, and could mean that – despite predictions otherwise – the country will be able to meet its renewable energy target of 33,000GWh in 2020.
Around 5,000MW of wind and solar need to be built over the next three or four years.
But conservative forces continue to oppose the shift to renewable energy. Former prime minister Tony Abbott wrote in the Australian on Saturday that the RET should be scrapped immediately, and no new projects built.
Federal energy minister Josh Frydenberg has rejected that call, but returned for holidays last week with a renewed attack against additional state-based renewable energy targets, particularly those in Victoria and South Australia.
And the fossil fuel industry used the holiday period to blame electricity price increases in Victoria on renewable energy, ignoring the rising cost of gas and the bidding strategies of the major fossil fuel generators that have been responsible for most of the wholesale market price spikes.
The falling cost of solar, however, is likely to radically reshape the Australian energy industry in coming years. Large scale solar is becoming competitive with wind in costs, and is considered easier to get planning permission and quicker to build. It is also more easily shaped to size – from 5-20MW up to 200MW or more.
The Australian market is attracting numerous new solar investors, including new funds created for the purpose, and investors from the UK and Europe. But there is also a sense of first come, first served, given that there is no plan for renewable energy beyond 2020.
Right now, the price of large scale renewable energy certificates, at more than $80/MWh is attractive – but those prices may not last long if it looks like enough capacity is being built to meet the RET.
ENGIE’s move in Australia is part of a global corporate plan for no further investment in coal fired generators, and to become a major supplier of solar power. It is one of the prime instigators of the “terawatt” initiative, borne out of the Paris agreement and reinforced at the International Renewable Energy Agency summit in Abu Dhabi last year.
ENGIE is also focusing on local solar and battery storage, believing that half of all energy demand will be sourced locally in the future.
ENGIE plans to close Hazelwood in March, and while some analysts have forecast this could cause increases in wholesale electricity prices, others have said they construction of new large scale renewable plants such as wind and solar under the RET will help bring those prices back down again.
ENGIE also owns a majority share in the Loy Yang B brown coal generator, a retailer, Simply Energy, the Pelican Point gas fired power station in South Australia, the Kwinana gas plant in Western Australia, and Canunda Wind Farm.