India trumps Australia on solar mega project

If Australia’s grand Solar Flagships program was designed to accelerate the deployment of solar in this country, then it has clearly failed. If, as some suspect, it was designed as an ego-boosting claim to have built the biggest solar plants of their type, then it looks like it is going to fail on that count too.

Areva Solar, the winner of the solar thermal component of Australia’s flagship program, has just announced it has been awarded a contract to build a massive solar thermal plant in India – using the same technology and the same dimensions for that proposed at its site in Chinchilla in Queensland.

The main difference is that this project is scheduled to begin commercial production by May, 2013 – about the time that the flagships program, announced with great fanfare on at least three occasions by the Labor Government since 2009, is scheduled to start (if it actually gets a financing agreement).

Areva says the contract has been awarded by India’s Reliance Group for a 250MW solar thermal project using the compact linear Fresnel technology developed by Ausra, the company co-founded by Australia’s David Mills and bought by Areva two years ago. The plant, like the Chinchilla, proposal, will feature two 125MW modules, and will be the largest in Asia when constructed.

Areva says the first phase of the project, located in the sun-rich province of Rajasthan, is already under construction.

India has established a goal of building 20GW by 2022 under its National Solar Mission program. (Australia’s draft energy white paper canvasses around 3GW of solar PV and solar thermal by 2035). However, India expects that solar will cost less than coal by 2016, and reports from India this week suggest some solar power producers are snubbing fixed price tariffs because they will get a better deal from wholesale market prices, which are rising rapidly in that country.

“Today’s announcement is just the beginning,” said J P Chalasani, the CEO of Reliance Power, the largest independent power producer in India. It aims to have more than 300MW of utility-scale solar capacity in production by early next year.

Luc Oursel, the CEO of French based Areva, whose investments before buying Ausra were almost exclusively in nuclear, said he expected India’s “progressive solar energy goals” would enable the country to emerge as a leader in the global solar industry. “This contract reinforces the Areva strategy in renewable energies,” he said.

Indeed, while the rest of the world appears to be focusing more on solar PV, and has replaced some solar thermal projects with cheaper PV plants, India appears to have spotted an opportunity to focus on solar thermal. Local analysts expect around half of the 20GW Solar Mission to come from solar thermal plants, and the India government recently dropped import duties on solar thermal equipment.

In Australia, Areva is still waiting to hear whether the newly elected LNP state government in Queensland will deliver on its treat to renege on a promised $70 million contribution to the $1.2 billion Chinchilla project – a move that could threaten the entire venture. The Solar Dawn consortium that Areva heads has been given until the end of June to line up a power purchase agreement and financing for the project. Areva is also constructing a 44MW solar “booster” plant to the coal-fired Kogan Creek power station using the same CLFR technology.

Meanwhile, Energy Minister Martin Ferguson said a decision on whether the second round of the $1.5 billion flagships program will go ahead rests not with the federal government but with the soon-to-be created Australian Renewable Energy Agency (ARENA), with a board and CEO to be named by Ferguson soon.

“It will not be a decision for the Government as to whether a second round of Solar Flagships funding occurs,” Ferguson told a Clean Energy Council forum in Melbourne on Thursday. “Rather, it will be for ARENA to determine, through the independent Board’s own funding strategy, what further support exists for large-scale solar projects.”

He said ARENA and the Clean Energy Finance Corporation – the details of which are expected to be unveiled next Tuesday in Canberra – will be independent – “not only from the Government, but also from short-sighted misinformation campaigns run by interest groups that think they alone know the answer to Australia’s energy security challenges.”

He described a campaign by ” grassroots environmental groups” and “energy autodidacts” to push for 2000MW of large scale solar to be funded by the CEFC as   “misinformation” that  “ignores and misrepresents” the Government’s substantial commitment to large-scale solar.