US renewable energy and solar specialist Recurrent Energy says up to 2,500MW of utility-scale solar could be built in Australia by 2020 if the renewable energy target is kept as is.
Recurrent Energy says utility scale solar PV will be cost competitive with wind energy within a few years – as others such as Bloomberg New Energy Finance have pointed out – and that will mean fewer wind farms will be needed to meet the 41,000GWh target.
Colin Liebmann, the project developer for the company in Australia, says Recurrent Energy has a pipeline of 1,500MW of utility-scale solar PV in the country.
An 80MW plant in Queensland could be first off the rank, and could be built as early as 2016, if financial close is made next year. Council planning approval for the project, in a yet to be disclosed location, is expected soon.
Liebmann says the company has a portfolio of about 20 different projects – all connected to the main grid on the eastern states, or the main grid in Western Australia.
“They are typically larger scale solar farms, of around 30MW to 50MW and up,” he told RenewEconomy in an interview.
“We are taking strategic approach, looking for best solar resource, the ability to connect, avoiding transmission losses, and matching to network loads.”
Most of the Recurrent Energy solar farms in north America have been in the 10MW to 20MW range, although Liebmann expects future plants could be in the 100MW to 200MW range as utilities choose solar PV over gas to meet peak demand requirements.
He says utility-scale solar PV could be installed in the US on an unsubsidised basis from around 2017. It is already occurring in countries such as Chile. Solar costs are falling – some technology providers such as First Solar promise a fall in installation costs from $1.60 a watt to less than $1 a watt by 2017 in the US, and the balance of systems costs – delivery, inverters, connections etc – are also coming down.
“Utilities see the value in long-term offtake contract for solar – they have no other way of fixing the price of peak energy for 30 years. Gas prices are so volatile,” he says.
He noted that the solar industry employs 143,000 people in the US, and this is growing at 10 per cent a year. The coal industry, on the other hand, employs 123,000 people and this is falling 10 per cent a year.
The costs of solar PV in Australia will be unlikely to match that of the US until more projects are built. So far, there is only one grid connected solar PV farm in Australia, with another to be connected soon.
“It’s not so much a timing issue as a capacity issue,” Liebmann says. He says it would need around three developers completing three projects – for a total installed capacity of around 500-600MW – before solar PV can get close to the cost curve achieved in the US.
So far, Australia has only one utility-scale solar PV farm connected to the grid – the 10MW Greenough River solar farm near Geraldton in Western Australia. Th 20MW Royalla solar farm is soon to be connected in the ACT, while several other projects are being built in the ACT and in western NSW.
“Filling the RET up with another 8,000MW of wind is not an optimum outcome,” he said. But there are impediments – including the uncertainty around the future of the target, and the ability to access “fair and financeable” power purchase agreements.
He also said market rules should also be modified so that the network benefits that utility-scale solar can provide – such as the deferral of network upgrades and reduced transmission losses – can be valued.