Queensland fast-tracks auction for 400MW renewables, energy storage

The Queensland Labor government has unveiled a $1.6 billion plan to unlock thousands of megawatts of large-scale wind, solar and pumped-hydro energy projects throughout the state, including a reverse auction for up to 400MW of renewables and energy storage (100MW).

The plans for renewable and energy storage auctions were revealed as part of an overall policy strategy that saw the Queensland government reinforce its commitment to sourcing 50 per cent of its electricity needs from renewable energy by 2030.

The Powering Queensland Plan – launched in Brisbane on Monday ahead of the state Budget, and in anticipation of the COAG meeting later this week – marks the latest effort by Australia’s state and territory governments to strike out on their own to address soaring electricity prices and the energy transition.

The plan also establishes a state energy security taskforce, a primary goal of which is to implement Finkel Review recommendations relevant to Queensland, in yet another illustration of the widening gap between the federal and state governments on the matter of energy reform.

“The Palaszczuk government will continue to work at the national level to support integrated policy, but in the absence of federal leadership we will not stand idly by and ignore the challenges facing the market,” Queensland energy minister Mark Bailey said on Monday.

“The Powering Queensland plan is firm action to ensure we continue to meet Queensland’s current and future energy needs.”

Speaking at the launch of the Plan, Bailey said the reverse auction, to be held in the second half of 2017, would be one of Australia’s biggest, and would include a 100MW energy storage component, to reflect the important role energy storage technology had to play in the shift to renewables.

(Note: For all the battery storage pedants out there, the Queensland government did not give a MWh estimate of their battery storage tender. That will come later).

“This will be one of the largest reverse auction processes that we’ve ever seen in this country, and it will add to the clean energy boom that’s happening already in north Queensland, in the Darling Downs, in central Queensland, where we’re seeing thousands of clean energy jobs coming in to Queensland as these large-scale solar farms, 17 of them, come into our state, because of the leadership of this government,” Bailey said.

As well as the reverse auction for large-scale renewables and energy storage – a policy lever that has been used to varying degrees and with considerable success in the ACT, Victoria and South Australia – the roadmap includes the plan to build a new transmission line in the state’s north, which was announced before the weekend.

As we reported on Friday, the new 500km transmission line – which is part of a $365 million Powering North Queensland Plan – aims to unlock more than 2000MW of large scale wind, solar and hydro projects, and create 5000 jobs.

The chief beneficiaries of the north Queensland plan will be the proponents of the 1,200MW Kennedy wind and solar park – the largest project of its type in the world – along with other wind and solar farms, and some hydro projects.

On Monday, Bailey described the north Queensland transmission line as a “really important part” of the plan.

“We’ve got a whole lot of large-scale renewable energy projects, some of them absolutely fascinating mixes of wind, solar, hydro, who all want to plug in to our system,” he said. “We’ve got to update our system to make sure that those projects commence, that we get that generation coming in, but importantly, that we get more and more clean energy production happening in Queensland, because that’s where the lowest cost (generation) is happening.

“We’ve got to facilitiate the new (energy generation) technology that’s coming in, that’s getting cheaper and cheaper by the year, and that’s what this plan does,” Bailey said.

For the state’s north, the plan also proposes investing a further $100 million to help fund the proposed hydro-electric power station at Burdekin Falls Dam, which – subject to feasibility – is expected to begin construction from 2020, and support up to 200 jobs.

The government also plans to commission a hydro-electric study to assess options for deploying new hydro in the state.

The Powering Queensland roadmap also includes the previously announced $770 million subsidy the government will pay to ensure consumer electricity prices do not rise ahead of the upcoming state election, as we reported here on Friday.

And – while it recommits the government to its 50 per cent by 2030 renewable energy target – it also makes provisions to restart Stanwell Corporation’s 385MW Swanbank E gas-fired power station, in a further effort aimed at reducing retail power prices.

Other policy measures include the establishment of the above-mentioned Queensland Energy Security Taskforce; measures to improve large-scale energy project facilitation, planning and network connections; the implementation of the Queensland Gas Action Plan; an investigation of the restructure of the government-owned corporation generators and potential establishment of ‘CleanCo’; and continued advocacy for stable, integrated national climate and energy policies.

State energy minister Mark Bailey said on Monday that the first priority for the Taskforce – which will be chaired by Finkel Review panel member and former Energex Chief Executive, Terry Effeney – would be to work with Queensland’s energy businesses to ensure the state’s system remained secure during the high demand periods over the coming 2017–18 and 2018–19 summers.

“The Taskforce will also lead work into developing transmission infrastructure in Queensland’s North-West to support a clean energy hub, assess the need for expanded interconnection between Queensland and other states, and investigate new hydro-electric generation sites,” Bailey said.

And, of course, it will implement “Finkel Review outcomes accepted by Queensland.”

“The Palaszczuk government is today releasing its response to the Renewable Energy Expert Panel Final Report and re-affirming our commitment to a 50 per cent renewable energy target by 2030 (RET),” Bailey said.

“The Expert Panel’s Final Report confirms its draft findings that the RET will deliver significant economic benefits to Queensland, with a broadly cost neutral impact on electricity prices while maintaining system security and reliability.

“On the basis of these recommendations, the (Queensland) government will support investment for up to 400MW of diversified renewable energy capacity by providing revenue certainty through a reverse auction process, including a 100 megawatt energy storage component, with an emphasis on supporting local jobs and benefits,” he said.

“The Palaszczuk Government is taking action and we have kick-started a renewable energy boom,” Bailey said on Friday.

“With additional generation competition and supply – we can help put downward pressure on prices which is great news for all Queenslanders.”