More solar farms prepare to connect as solar pipeline leaps to 35GW

Another three solar farms – and another major wind farm – are preparing to connect to Australia’s main grid as the pipeline of large-scale solar projects leaps to 35GW, and the uptake of rooftop solar also continues to surge.

According to Paul McArdle from WattClarity, the providers of our popular NEM-Watch, the Whitsunday and the Hamilton solar farms in central Queensland, both 57.5MW, and the 110MW Darling Downs solar farm in south-west Queensland, are now going through the connection process.

(And so too is the 138MW Mt Gellibrand wind farm in Victoria, according to Dylan McConnell from the Climate and Energy College, joining the 54MW Salt Creek wind farm that began production just last week).

The new PV projects will soon join some 564MW of large-scale solar that have already been connected to the grid – including the two largest solar farms to date in Australia, the first stage of the 220MW Bungala solar project in South Australia, and the 124MW Sun Metals solar farm in north Queensland.

That means that for the first time, installations of large-scale solar are keeping pace with rooftop solar, although by the end of the year the addition of more large-scale projects should see large-scale taking the lead. (See graph above from the Sunwiz Large-Scale Lookout data).

“The capacity of systems over 100kW commissioned so far in 2018 has already reached 574MW, double the previous best year (2015), and we’re not even half-way through the year,” says Sunwiz director Warwick Johnston.

“This is practically equal to the volume that has been registered in the STC market (584MW).” The STC market applies to systems of 100kW or less.

“We’re now tracking 259 solar farms with total capacity of 35GW,” Johnston adds, noting that the figure has been boosted by the recent proposal to build 3GW of large-scale solar in the Pilbara to satisfy demand in south-east Asia, through a sub-sea link, and local mining and manufacturing businesses.

It is becoming clear that solar is now underpinning the business decisions of many large-scale Australian manufacturers and other big industrial users.

Sanjeev Gupta is leading the way in sheer scale, planning 1GW of solar plus storage in South Australia to make his Whyalla steelworks profitable, and talking of up to 10GW of large scale solar around the country to underpin the energy needs of his own steel businesses, a possibly new copper business, and other energy users.

Already, Gupta’s SIMEC ZEN Energy has signed up five large-scale industrial and mining groups in South Australia, promising to deliver “firm” solar output via a new 220MW solar farm near Whyalla and ultimately with a 120MW/140MWh battery and pumped hydro.

Sun Metals has nearly completed construction of its 124MW solar farm in north Queensland that it says will slash its electricity costs and provide the price certainty to go ahead with a $300 million expansion.

It was interesting to note that even in the Australian Financial Review, energy analysts such as Bruce Mountain, from CME, were being quoted wondering why the Tomago smelter in NSW wasn’t looking for wind and solar to reduce its electricity costs.

At the moment, Tomago relies on a contract from AGL with its supplies depending on the ageing, increasingly expensive and unreliable Liddell coal generator. Last week it was forced to switch off some parts of its production because of soaring prices as numerous coal generators were out of action, including much of Liddell.

Mountain points out, as RenewEconomy did earlier this week, that solar prices are now in the $40s and $50/MWh, which is cheaper than the bids made by the black coal generation fleet in NSW.

Mountain pointed out that just the marginal cost of coal at current prices indicates a generation cost of $60/MWh, and that’s without the capital cost and maintenance cost of the plant.

“He will have a contract with a retailer, he can buy the shortfall from the retailer but if he can source the whole lot of his production for 10 or 15 years at $40 or $50/MWh why wouldn’t he?” Mountain told the AFR.

Others are clearly understanding the cost advantages. Companies such as CUB, Mars Australia, and University of Queensland have committed to going 100 per cent solar, while numerous other companies are signing up for deals with solar or wind plants to supply at least part of their needs.

The plunging cost of solar, with more cost falls expected as the forecast 30GW of surplus module capacity washes through global markets, as well as cheap wind, is enabling brokers and some retailers to put together “firming products” – the cost of solar and supply when the sun doesn’t shine – of less than $80/MWh.

Even the combination of solar and battery storage is being priced below that level – according to manufacturers such as Fluence – with huge implications for the structure and contracting arrangements in the local energy market.

Of course, the 35GW of solar projects in the pipeline won’t all see the light of day. Many are competing for a position to secure the “last” of the projects that could benefit from the 2020 renewable energy target, despite most analysis that it is already effectively met.

Many more will be competing for position in the various state targets – such as Victoria and Queensland – while others will be jockeying for attention from corporate buyers. According to some in the industry, some projects are being “announced” simply as part of a “network grab” and getting priority in connection negotiations.

Much may depend on the structure of the National Energy Guarantee, more details of which will be released this Friday afternoon.

The latest word is that apparently the documents will be released around 5.30pm on the Friday, which is when governments typically hang out their dirty washing.

It will be a busy day for the industry, and for energy journalists, as the ESB and its members, which include AEMO and the AEMC, have chosen the same day to release their annual consumer survey (AEMC), and what could be a landmark report on the future of rooftop solar (AEMO).

For more information about the Large Scale Solar Lookout data, please click here.