Queensland government doubles large scale solar target

The Queensland government has decided to double its short term large scale solar target, announcing that it will provide long term financial support for up to 120MW of large scale solar farms in a bid to fast-track the sector in the state.

The new target represents a doubling of its recent Solar60 target, which aimed to support 60MW of large scale solar, and is triple its election commitment of 40MW. It could mean that up to three new solar farms are built in the state.

The increased target was announced by Premier Annastacia Palaszczuk during a visit to the US National Renewable Energy Laboratory in Colorado this week in a bid to end the investment drought in the state and fast-track the development of large scale solar.

“Developing and expanding Queensland’s renewable energy industry is a central component of my Government’s energy policy agenda, and will create new jobs and diversify the economy,” she said in a prepared statement.

What is now known as the “Solar 120” target is linked to a tender by the Australian Renewable Energy Agency, which is offering a total of $100 million to help develop large scale solar across Australia. Out of 22 projects shortlisted for that tender, 10 are based in Queensland.

Queensland is offering “contracts for difference” over a 20 year period. Effectively, this takes the risk out of the wholesale and renewable energy certificate market for the developers, removing a large element of risk.

The announcement is also timed just before the deadline for ARENA bids closes. It could mean that Queensland projects can tender for a smaller grant from ARENA, giving them a potential advantage over projects in other states.

The state so far has little in the way of large scale solar or large scale wind, although Origin Energy recently signed a long term power purchase agreement for the 100MW Clare solar farm south of Townsville, and Ergon signed a 12.5 year purchase agreement for the 170MW Mt Emerald wind farm near Cairns.

“By providing long-term financial support this initiative ideally complements ARENA’s program which will provide upfront capital grants to construct major renewable energy generators,” energy minister Mark Bailey said.

“The combination of these two initiatives will lower the cost of large-scale solar and remove obstacles such as financing and commercial viability to support the growth of large-scale solar in Queensland.”

The Labor government has set a 50 per cent renewable energy target by 2030, and already leads in rooftop solar, with 1.5GW of installed capacity – making it the second biggest power station after the Gladstone coal generator.

“Sadly we have not had a large scale renewable energy industry commenced in Queensland.  This is a very strange situation given we have best solar resources in the country, and in the world,” Bailey said, adding that ARENA had previously been effectively “locked out” of Queensland by the previous government’s antipathy to renewable energy.

But he suggested the costs of renewable energy and solar in particular were plunging, and cited the Origin deal with Clare solar farm, which is reportedly in the $80s/MWh – prices that were not expected to be seen until 2020.

However, that price is not considered realistic, since its owners FRV have a similar priced deal for the Moree Solar Farm in NSW, which was heavily subsidised with ARENA grants and CEFC financing. Hence the need for the contracts of difference.

Bailey said the costs to government would be “modest”, but said there was significant increase in solar from the private sector in Queensland, and the opportunities were huge.

“Queensland is quickly transitioning from the Sunshine State to the Solar State,” Bailey said.“The Solar 120 program will create hundreds of regional construction jobs, boost investment, act on climate change, and deliver value for both customers and government,” he said.