Investors back 1000s of MW of new solar projects in Australia – just don’t mention the RET

Plans to build two major new “battery ready” solar projects in Australia have been announced by Asia’s largest independent renewable energy developer and investor, Singapore based firm Equis Energy, with two 100MW plants set to be built in South Australia and Queensland.

The projects, confirmed by Equis on Wednesday, will both be paired with fossil fuel power generation and transmission infrastructure: one with a new diesel powered plant near Taliem Bend in South Australia, and one with the existing Collinsville north substation in Queensland.

Announcement of the projects – which are expected to deliver power for nearly half the current cost electricity in South Australia – comes as Australia’s renewable energy target is, again, being used as a political football, particularly by the federal government, whose far right faction has reissued calls to scrap it completely.

Turnbull, while assuring he has no plans to acquiesce, is at the same time leading criticism of the states for introducing their own, much more ambitious, targets for renewable energy investment and development – a push he described at his National Press Club speech on Monday as a “mindless rush into renewables.”

Predictably, the PM made this one of the major themes of his National Press Club address on Wednesday, claiming repeatedly that federal Labor’s key policies – a 50 per cent RET by 2030 and an increased emissions reduction target by 2030 – would mean higher power prices and less network stability.

“Labor’s approach (to energy) is driven largely by ideology,” Turnbull told the NPC audience, without a hint of irony. “This isn’t an abstract issue. Higher electricity prices mean more pressure on household budgets and businesses. That’s why energy will be a defining debate in this Parliament. We’re determined to help families and businesses by making electricity affordable and reliable; Labor’s policies mean higher power prices and energy insecurity.”

Turnbull used South Australia to illustrate his point, rolling out the familiar conservative theory that that state’s ambitious approach to renewable energy development – as well as its phase-out of “baseload” coal power – was inextricably connected to its high electricity prices and recent blackout events.

Of course, this position (you can read more about what Turnbull said about energy in his NPC address here), has been countered by many well respected and experienced industry analysts and players – not to mention by major electricity market reports. And many argue that investment in renewables is what is needed now, to avoid greater electricity supply and infrastructure costs in the future, and to bring the grid into the 21st Century.

But while the political debate circles endlessly, investors like Equis and companies like Snowy Hydro, are getting on with the job, investing in clean power generation assets that they say will supply secure and cheap electricity.

Equis says the $400 million projects are just the tip of the iceberg for the company’s solar plans in Australia, with plans for another 1,000MW of large-scale solar projects to be built over the near term, for which land rights have already been secured.

For now, however, the focus will be on the above two projects, both of which Equis says will be designed as “battery storage ready”, to further enhance their value to the greater grid.

Already, for the Taliem Bend project, Equis has signed a Power Purchase Agreement (PPA) with Snowy Hydro, the owner of the 28.8MW diesel power station that’s also being built this year, to support its iconic 4,100MW Snowy Hydro-electric Scheme.

Snowy Hydro, which has been considering adding solar to its generation portfolio for some time now, has agreed to purchase 100 per cent of the power produced from the Tailem Bend Solar Project for at least 22 years. Construction of the project is expected to start soon.

The company’s chief executive, Paul Broad, says the deal with Equis made sense given the changes taking place in the South Australian market, with prices rising and fossil fuel generation coming offline.

According to Equis, Tailem Bend will be one of the lowest-cost solar projects in Australia to date, supplying power at around 40 per cent less than prevailing South Australian market prices.

For Broad, other major benefits of adding solar will include a more diverse and more reliable portfolio of generation to draw from, particularly as its retail business, Lumo, grows beyond 50,000 customers.

In NSW, the company added gas-fired generation last year through the $234 million purchase of the Colongra gas peaking plant.

“You’ve got to think about the risks, and we think about that constantly,” Broad said. “To survive this market you’ve got to integrate, you’ve got to control your own destiny.”

“Cheap baseload power is coming out of the system and the forward curve is getting stronger: it’s hard to see that not continuing,” Broad said in another interview, adding Snowy would in future be able to call on a combination of diesel and solar power in South Australia to grow its retail position there.

Broad also said he expected that battery storage, potentially using Panasonic hardware, could be added within four years.

As for Equis, the group’s CEO, David Russell, says the Tailem Bend Solar Project represents an “exciting expansion” into Australia, and a “unique opportunity to leverage our development and construction expertise to deliver low cost, large-scale, reliable renewable energy for Australian consumers.”

“By developing the Tailem Bend Solar Project and Snowy Hydro diesel projects together, the combined system will have the capability of providing stable power any time of the day across the entire year.” Russell said.

“In addition, the Tailem Bend Solar Project has been developed to facilitate large scale battery storage further enhancing the “base load” like nature of the projects.”

The 100MW Collinsville project, meanwhile, has gained development approval from the Whitsunday Regional Council to be constructed on land close to the Collinsville North substation, with works expected to being this year.

Equis, which is developing the two projects entirely, now has a total of 49 renewable energy projects under development and construction, having completed a further 33 utility scale renewable energy projects in Asia over the last 3 years.

The two new Australian projects alone are expected to supply the annual power needs of 63,165 homes, and employ more than 400 people in regional communities during the construction phase.