Origin signs up for 200MW solar plant in S.A, as PPA prices tumble

Origin Energy has firmed up its position as Australia’s top contractor of large-scale solar, after revealing its latest power purchase agreement with a major South Australian solar project that is to be built by a former coal chief near the former coal hub of Port Augusta.

Origin said on Thursday in its half-year results presentation that it had signed a PPA with the Bungala Solar Project, a potentially 200MW affair being developed 7km north-east of Port Augusta by start-up renewables outfit Reach Solar.

As we reported here in October, Reach – which is headed up by former coal power executive Tony Concannon – applied for development approval of a 300MW single axis tracking solar PV power plant in September.

The idea for the grid-connected solar plant is that it will draw on the skilled local Port Augusta workforce and existing transmission infrastructure, both of which are “underutilised” since the April closure of the 760MW coal-fired Flinders and Playford power stations.

According to Calabria, the project now aims to build an initial 100MW array, with plans to add a further 100MW in the future.

The Bungala deal is the latest of several for Origin, which says it has contracted a total of 275MW of big solar in the first half of 2017 alone, making a total of 375MW of signed PPAs yet to come into production.

Other recent deals include the 10.6MW Degrussa solar and storage project in remote Western Australia, and the 10.8MW Lakeland solar plus battery storage plant.

In an interview on Thursday afternoon, Calabria told RenewEconomy that, as big solar costs had come down, the company had taken the opportunity under the RET to issue more long term contracts.

Indeed, you can see in the chart below, taken from Origin’s presentation, just how far, and how fast, the cost of large-scale solar generation has plunged in Australia. The PPA prices are now well below $80/MWh, effectively half of where they were in 2012.

But Calabria, who stressed that Origin was looking at both wind and solar, said it was also experiencing growth in rooftop solar with business customers – solar as a service.

“We have been leading growth in that segment of the market,” Calabria told RE. “When you have higher wholesale prices, it can suit some customers in the right circumstance.

“That’s what we’re seeing.” he said.

On battery storage, Calabria said his team was “watching that technology” as the market matures and improvements in efficiency and cost of the technologies are made.

“It will play a role, whether on the grid or in the home. It will be part of broader solution,” he said.