Hazelwood owner ENGIE seeks large scale solar power stations in Australia

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Engie to invest in new large scale solar farms as it prepares to close Hazelwood, confirming the rapid shift from coal fired power to solar in Australia. Still, conservatives and fossil fuel lobbyists are continuing to attack renewables.

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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.

ENGIE Solar 4The 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.

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27 Comments
  1. lin 3 years ago

    Fantastic. Perhaps Mildura might finally get a large scale solar plant up, after decades of promises and nothing to show for it.

  2. lin 3 years ago

    Fantastic. Perhaps Mildura might finally get a large scale solar plant up, after decades of promises and nothing to show for it.

    • JLMD 3 years ago

      Lin. I would be happy to talk to you about a scale solar plant in Mildura

      • lin 3 years ago

        Not really much to say. Solar tower that was announced looked interesting but perhaps a bit ambitious. The concentrated PV proposal looked like it should have been a goer, but that fell over. The district has more sunshine than the Gold Coast, and already has an HV transmission line. Land is cheap, plenty of labour and infrastructure to support it in Mildura, and it is in Victoria, so ideally placed to replace Hazelwood.

      • Wendy Farmer 3 years ago

        How about a solar plant in Latrobe Valley

        • lin 3 years ago

          Also an excellent idea. Could be combined with wind generation, and use the old coal pit for pumped hydro storage. Not as much sun as Mildura, but close to Melbourne and with good access to existing grid assets.
          We should be doing as much as possible as quickly as possible in this space, not as little as the LNP/IPA/FF types can orchestrate with their lies-and-fear campaigns. Most coal plants in Australia are at or nearing end of life. Nobody with any credibility wants to build more. So the faster we can iron out any supply issues with renewables, the more secure and sustainable our energy supply will be.

        • Mike Shackleton 3 years ago

          The Basslink HVDC line connects from Tassie to the Loy Yang power plant. Tasmania could build out a lot more wind capacity and excess could be pumped either in suitable Tassie hydro assets or to pumped storage assets in Latrobe valley. We haven’t even scratched the surface on what we can do.

        • Jonathan Prendergast 3 years ago

          By some rough calcs, Mildura get’s 27% more sun than Latrobe Valley. Latrobe Valley has especially poor solar irradiation in winter months.

          By comparison, Sydney is somewhere in the middle between them.

          This means for the same project, an investor will get 8% returns in Mildura rather than 6% in Latrobe Valley. After leveraging with a loan, this can mean 8% returns rather than 12%.

          It seems the Vic Government will have programs to help overcome this barrier, and promote solar in Vic.

          • Wendy Farmer 3 years ago

            Yes but with the little less production from the sun the gain is in the infrastructure that is in the Latrobe Valley ready to be used instead of having to be built. Speaking to a development company yesterday LV is in a great position because of this infrastructure.

        • George Darroch 3 years ago

          Gippsland is far better suited for wind than solar. Mike Shackleton is right that Tasmania’s hydro is a huge battery resource for the southern states, and needs to be used accordingly.

          • Cooma Doug 3 years ago

            All that is required is a tweak of the market rules. There is plant in NSW that can store 10 gwhs a day as well as Tasmania and smaller quantities in Vic.
            It is rarely used because it is not worth it in the status quo market. It is best to take advantage of volatility. It doesnt pay well to flatten the profile.

        • On Time Typing 3 years ago

          How do we make sure our leaders in the Valley (local government) and the Victorian state government work together with Engie on this to try to get this fantastic new opportunity established in the Valley?

          • Wendy Farmer 3 years ago

            They are listening & interested.

  3. solarguy 3 years ago

    Good another company that gets it, I just hope they remember the storage!

  4. howardpatr 3 years ago

    “Former prime minister Tony Abbott wrote in the Australian on Saturday that the RET should be scrapped immediately” – the medieval leader of the many LNP anthropogenic climate change deniers has spoken again and once again revealed his abject ignorance of the climate sciences.

    Perhaps he should just stick to his brand of theology and his beloved faith in fairies.

    • trackdaze 3 years ago

      People still read the australian?

      • MaxG 3 years ago

        Well… people vote the LNP…

  5. Cooma Doug 3 years ago

    Starting off with good news. Thanks Giles.

  6. Cooma Doug 3 years ago

    I get hot and steamy thinking about Trump. That might be a problem? Or are the ecconomic signals too good to block now.

    • Citizen Smith 3 years ago

      Like a coal fired power station?

  7. bedlambay 3 years ago

    Team Australia spruiker Abbott is anything but a team player. He continues to be a huge annoyance to much of the public and his colleagues. A not so humble back bencher.

    • Citizen Smith 3 years ago

      I have suggested to several residents of Sydney who oppose renewable energy that a small nuclear power plant or coal fired power station be built on Cockatoo Island or at the at Garden Island. According to them coal can be clean and nuclear is safe. If this is true then these locations are ideal with access to infrastructure, cooling water and close to the biggest market in Australia for electricity. The look of horror on their faces was priceless.
      I wonder if Mr Abbot would support it.

    • Barri Mundee 3 years ago

      He’s a symptom of a gremlin infestation that we need to eradicate!

  8. trackdaze 3 years ago

    From the time between hazelwoods announcement and its subsequent closure there will be approximately 500mw of renewables added to the grid.

  9. Ren Stimpy 3 years ago

    Looking forward to seeing a lot more orange on the Live Generation widget (above) in the near future. A lot more orange and a lot less brown!

  10. On Time Typing 3 years ago

    Although I would love it to be placed in Latrobe Valley (because I live
    here) I agree with Jonathan Prendergast. In fact I have had solar power
    (residential) for the past 5 years and it is a wonderful thing in the
    summer but almost useless throughout most of the winter; Latrobe Valley
    is the cloudiest and rainiest place I have ever lived. Having said that,
    I do expect a large percentage of our cloud-cover to disappear once the
    coalstation closes down and removes all that smog that usually hangs
    over the valley and hugs in the humidity; I expect bluer skies and
    fiercer heat and for my solar panels to produce more power. But I am not
    a scientist: do these thoughts make sense?

  11. Don McMillan 3 years ago

    The biggest threat to the renewables industry is not the politicians or the coal industry, it is the destruction of the gas industry. Blaming exporters or E&P companies is completely meaningless as replacement resources has ceased. So you better start importing batteries [ cannot not manufacture them here as you need natural gas feedstock] I hope I am wrong I see a very bleak future.

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