S.A. Govt fast-tracks switch to renewables with Zen contract | RenewEconomy

S.A. Govt fast-tracks switch to renewables with Zen contract

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South Australia government fast-tracks switch to 100% renewable energy by signing contract with SIMEC ZEN Energy while Aurora 150MW solar tower and molten salt storage project is built. It will help underpin Zen’s own 1GW solar and storage plans.

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The South Australia government has decided to fast-track its switch to 100 per cent renewable energy by contracting with Adelaide-based SIMEC ZEN Energy while it waits for the Aurora 150MW solar tower and molten salt storage project to be built.

The contract will underpin SIMEC Zen Energy’s plans to build 1 gigawatt of solar, storage and demand management to power the Whyalla Steelworks, which is switching to renewables and expects to cut its costs by 40 per cent in doing so.

“This is the beginning of a journey that will see SIMEC Zen Energy redefine the energy landscape of Australia, bringing down costs dramatically and making globally competitive energy a key advantage for Australian industry,” chairman Sanjeev Gupta said in a statement.

Gupta, the UK-based billionaire investor, bought the Whyalla steel assets – along with OneSteel’s operations near Melbourne, Sydney and Newcastle – after eyeing an opportunity to switch to green energy, save on energy costs and underpin expansion.

As part of that deal, Gupta’s GFG Alliance also emerged as the major shareholder in Zen Energy, formerly chaired by Professor Ross Garnaut, which earlier this month obtained its electricity retail licence, as exclusively reported by RenewEconomy.

That has enable it to sign a deal with the South Australia government to deliver 80 per cent of its electricity needs in 2018, and 100 per cent from 2019, all of which will come from renewables, and assisted with demand management.

SIMEC Zen will supply that green power through its own renewable investments, but will also contract with other suppliers in the meantime.

The South Australia government electricity needs – to power hospitals, schools, rail and other government operations – equate to around 500 gigawatt hours, or the equivalent of nearly 200MW of wind and solar.

The State Government will be SIMEC Zen Energy’s first electricity customer and is expected to help it attract other customers to its “base-load renewables” product, bringing much-needed competition to the state’s retail electricity market and putting further downward pressure on prices.

The government currently contracts through Alinta, Origin Energy and Simply Energy.

Premier Jay Weatherill said the SIMEC Zen contract will be “competitive”, suggesting it was in and around the $75/MWh offered by US-based SolarReserve, which is to build what will be the world’s biggest solar tower and molten salt storage facility near Port Augusta.

SIMEC Zen will also help the government with improved demand management practices to further improve the reliability of the grid by reducing system load during periods of high demand.

It will provide the State Government with ongoing retail services for five years from November, 2020, during which time the whole of the State Government’s load will be supplied by the Aurora solar thermal plant at Port Augusta.

Koutsantonis said SIMEC Zen Energy would be able to provide large energy users with power at better prices than we have been seeing from the established providers.

“This contract will help underpin SIMEC Zen Energy’s investment in South Australia and add new competition to the retail market, putting downward pressure on power prices that will benefit all South Australian,” Koutsantonis said in a statement.

“Earlier this year, we used our power supply requirements to underwrite the entry of the Port Augusta solar thermal plant to the market, which will put downward pressure on power prices for all South Australians, but also create hundreds of jobs for locals in the Upper Spencer Gulf,” Weatherill said.

The timing of the contract is important, as the state will go to the polls in March.

Weatherill and Koutsantonis have have said the state’s economic future lies in the further development of its renewable energy resources, which already contribute more than 50 per cent of the state’s demand, and the development of storage options.

The Tesla big battery has already been opened, another battery at Wattle Point wind farm is planned for early next year, the Lincoln Gap wind farm plans its own battery storage, and Zen Energy is looking at both battery storage and pumped hydro. Two other pumped hydro stations are also mooted.

Sanjeev Gupta: Supplied by company.
Sanjeev Gupta: Supplied by company.

The GFG Alliance investment in Whyalla steel and its focus on renewables to guarantee lower costs and its future, and a similar strategy by Queensland zinc refiner Sun Metals, has helped turn the argument against renewables on its head.

Gupta said Australia deserves a competitive energy industry.

“This will drive jobs and growth, it will encourage the private sector to invest and entrepreneurs to take more risk, not only in South Australia but across the country.”

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  1. suthnsun 3 years ago

    It sounds like SA is turning on the undeniable but hitherto denied capabilities of renewables. Bravo! The power supply industry has been turned on its head. Oz has a brighter future courtesy of SA genuine leaders..

  2. Steve159 3 years ago

    Well we can expect the Murdoch press, and the LNP to ramp up their “when the sun don’t shine and the wind don’t blow” rhetoric, the closer we get to that March election.

    Hopefully by then only the dumbest, and most rusted-on LNP voters (I think generally that could be considered a tautology), will not see the merit and obviousness of renewables.

    • Rod 3 years ago

      Unfortunately, I think a Labor majority will not be the outcome of the March election. With the Libs puppets for what the COALition sprouts and Xenophon anti wind (this week) I’m hoping there are binding contracts signed to discourage any rollback of Jay’s good work.
      And you are correct, the bias from the MSM including their ABC will be working overtime to ensure SA Labor’s demise.

      • Mike Shackleton 3 years ago

        I don’t think it matters how anti-wind the Coalition or Xenophon are – there is so much wind and solar capacity in the pipeline for SA they won’t be able to turn it back. SA’s problem in the future will be it has days where output is so high they will have to upgrade the interconnects in order to export it east!

        • Rod 3 years ago

          Yes, the local Libs promised $200 Million for a 2nd interconnector (which should have been built at the time of the ETSA sale, but that is another saga). The probable cost will be $2B. Good luck getting anything from the Feds towards it though.
          IMHO we have a need for tracking solar farms.

          • Brian Tehan 3 years ago

            $2 billion seems like an awful lot for a second interconnector. Why so much? Sometimes it seems like we pay several times what this kind of project would be worth in another country. Eg, the ridiculously high quotes for HSR down the east coast. The problem is that these high numbers kill the project straight up. Perhaps Gupta can put in a bid?
            The second interconnector would be very useful for both the NEM and SA.

          • Rod 3 years ago

            I think at the start of the discussion Electranet suggested the $2B price tag. They were doing a feasibility study but I haven’t seen the results. I agree, if the price is right, interconnection makes a lot of sense in a high RE % grid.

          • Mike Westerman 3 years ago

            Brian note the article is examining OH lines, not submarine cables – very much more expensive.

          • Brian Tehan 3 years ago

            According to this source 1000km of high capacity (2000 MW) AC or DC costs between US$500 and $600 million in the USA.

          • Sir Pete o Possums Reek 3 years ago

            Thanks for the excellent link.
            I also note the “break even” costs (against HV AC) for submarine cables is only 50 Kms .
            AND I would really like to take a gander at the Thyristors !
            They must be huge and made of some semiconducting version of gold 🙂

      • neroden 3 years ago

        It’s close but I think Xenophon voters and electeds will tip to Jay.

        • Rod 3 years ago

          I hope you are correct and I am wrong.

    • MaxG 3 years ago

      I called them dumb in the past, but have to concede that most do either not understand theses affairs (under-educated), or strongly believe in what they promote, or a simply followers of (and thus self-perpetuating) the mainstream media and corrupt politicians.
      These are sad times when it comes to common sense or rather the lack thereof.

    • Joe 3 years ago

      Rupe and his newsrags will no doubt go the full tilt Anti RE but the Sanjeev is the one putting his money where his mouth is and he will show up Rupe & co what dills they really are.

    • Joe 3 years ago

      But the sun does shine and the wind does blow somewhere. A truly National Grid will capture it fro hours on end across the full day..

  3. Tom 3 years ago

    “This will drive jobs and growth”.

    I’m not sure that Gupta’s word selection was pure coincidence.

    • Joe 3 years ago

      Who is this Jobson Grothe character anyway…anyone seen the dude?

  4. MaxG 3 years ago

    I hope the SA leadership shines, and encourages other fellow red and green politicians to join in and support the change required for a safer and environment-friendly energy future.

    • TechinBris 3 years ago

      South Australia is uniquely positioned to provide a future truly unified national power grid for our nation and it appears to be intelligently positioning itself to do just that.
      Now that is intelligence, in a political environment where intelligent decision is currently an oxymoron at best and stupidity seems to reigns supreme and cheered along in Corporate Media.
      We do need to ask why we continue to choose those politicians that can afford expensive marketing by accepting donations (influence) from Vested Interests, which profits so richly from us innocently falling prey to our own psychology being used against ourselves, incessantly and repetitively as history evidences, if we care to be honest with ourselves for once.

      The current SA Government should be congratulated for having the guts and the vision to step forward courageously, while other states capitulated in fear to Rupert’s Media Sewer and the Fossil Fuel Interest’s bribes to our politicians.
      SA’s Government, if they continue like this, could actually create a very nice bright future for their population, in contrast to the incumbent Big End of Town that currently rules the energy supply and demand environment, for their own maximised benefit only, achieved mostly at our own Society’s expense.
      Historically, South Australia has been a very progressive State in the past. Nice to see it is doing so again, in leading the way to a better possible future, for everyone.

      Go South Australia! Be proud!

  5. David leitch 3 years ago

    Actually I’d like to know more about the contract, is it for firm power? Is it in MW or MWh terms? How many years?

    • RobertO 3 years ago

      HI David Leitch (I have sent this to Giles) http://www.oasis.oati.com/PPW/PPWdocs/Instructions_CAISO_OASIS_(2).pdf
      Page 5 has web site address. Hope it what you want.

      • David leitch 3 years ago

        Thanks Robert

        I’ve looked at that and so far it doesn’t seem the answer. I’ll revisit when I get a spare moment.

        cheers and thanks again!

    • BushAxe 3 years ago

      You’re not alone on wanting more details! From what I gather it’s for about 500GWh p.a from 1st Jan 2018 to Oct 2020 (when Aurora comes online), where ZEN is going to source that amount of dispatchable renewables is anyone’s guess. I doubt there will be much uncontracted RE available until later in the year and ZEN’s own projects won’t be completed until the end of 2018 at the earliest.

  6. Carl Raymond S 3 years ago

    Adani cancelled contracts with Downer today. The port of Newcastle announced they must diversify because there was no future in coal. Plus this. The ground has moved. Decision makers have observed there are votes, and profits, in decarbonisation.

    • Joe 3 years ago

      Yes, I read those reports about Adani and Newcastle. Coal is dimming and in its final phase but the COALition is still holding onto the flickering flame.

    • mick 3 years ago

      yep saw that on the abc near fell over laughing

    • Chris Fraser 3 years ago

      So Hunter anthracites are among the best in the world and they’re Still looking to diversify. It just makes one curious as to Adani’s rather blinkered view of that crap ashy coal from the Galilee …

  7. Joe 3 years ago

    Premier Jay Leading The Way…..a catchy election slogan?

  8. SA_Jack 3 years ago

    South Australian company Zen Energy have moved from success to success, hopefully their entry into the SA generation and retailer sphere will genuinely increase competition in the market. Congrats to Zen on landing the contract

  9. john 3 years ago

    I expect the Murdock media to come out with the usual rubbish the sun does not shine or the moon is moving away in fact it is at 40 mm’s a year.
    it is inevitable the country with the most solar resources should use them.

  10. john 3 years ago

    I will paste in what exactly the Murder Media has been promoting with the side kicks help. https://uploads.disquscdn.com/images/9fa5bdc7ba4537d7fd809609b245142fd6fc5d455946e58cf282461c7b74e0d4.jpg

    • john 3 years ago

      Now look at the figures quoted absolute rubbish but this has been running for months it slightly annoys me.
      Click the image and zoom in to the rubbish LCOE of solar and wind let alone the so called cost of clean coal as in putting the CO2 into the ground somewhere which has not worked anywhere except to pump into a oil field to produce yet more FF.

      • Mike Westerman 3 years ago

        I’d love to see how they thought this would be connected – the grid in the north couldn’t support a HELE plant of the size that would be as cheap as you go (and even then wouldn’t be competitive with solar + storage.

        • john 3 years ago

          True I know that and so do you.

        • Glynn Palmer 3 years ago

          Mike, Powerlink (Qld’s transmission GOC) is doing a feasibility study on a clean energy hub in North Queensland that would unlock up to 2,000MW of renewable projects and support up to 5000 jobs. The transmission line will cost about $150million

          So where there’s a will, there’s a way.

          • john 3 years ago

            $150 million dollars.
            That seems a lot.

          • john 3 years ago

            Link to your $150 million dollars cost.
            In June 2017 the Queensland Government released the Powering Queensland Plan, which confirms its commitment to achieving a 50% renewable energy target by 2030, and invest $386 million to strengthen and diversify North Queensland’s energy supply, drive economic growth and support 5000 jobs. A large portion of that investment is a $150 million commitment to the development of strategic transmission infrastructure in North and North West Queensland to support a Clean Energy Hub, subject to a feasibility study.

            Perhaps this is what you referenced.,
            $150 million commitment to the development of strategic transmission infrastructure in North and North West Queensland


          • Glynn Palmer 3 years ago

            That’s right John. Note the $150 million is to support a “Clean Energy Hub” which includes (near Cairns) High Road Wind Farm, Tableland Sugar Mill, Mt Emerald Wind Farm, (Further west) Forsayth Wind Farm, Kidston Solar 320MW and Pump Hydro 250MW http://www.genexpower.com.au/ , Hughenden Sun Farm, Kennedy Energy Park Solar and Wind, (near Townsville) Ross River Solar Farm, Sun Metals Solar Farm, Clare Solar Farm. The Kidston project is 270km NW of Townsville.

          • Mike Westerman 3 years ago

            No hope of a 1GW single unit HELE on the proposed hub. It works because of the mix of sources and sinks ie genuinely dispatchable.

          • Glynn Palmer 3 years ago

            Exactly. The projects include solar PV, wind, PHES, and sugar mill bagasse bio. There are alternative renewable technology generators that will push electricity through when one of the sources isn’t available. The pumps for the PHES will be energised by solar PV at times of full capacity and forced curtailment.

    • Rod 3 years ago

      Is that a paid advert? Who is the sponsor?

      • john 3 years ago

        The federal government pays for this rubbish.

      • Jonathan Prendergast 3 years ago
        • Rod 3 years ago

          Thanks. Christensen! Say no more.
          Interesting use of dates (2014) for the AEMO reserve notice. Only 1000 signatures so maybe QLD voters and quite as stupid as georgeous George.

    • Glynn Palmer 3 years ago

      The data for this information comes from
      published in early 2017. Look at page 8 for the top map and page 10 for the LCOE’s
      which uses as its LCOE source http://www.co2crc.com.au/wp-content/uploads/2016/04/LCOE_Report_final_web.pdf
      published in November 2015. Look at figure E10 page 7 for the full list of LCOE’s. This report also includes the emissions intensity of USC pulverised coal at 773kg/MWh and with CCS 106 kg/MWh. Look at table 31 page 137.

      You have to take into account the reduction in costs over the last 2 years for both USC pulverised coal and solar and wind. The reports they are referencing are out of date.

      • john 3 years ago

        I know that as do you however this rubbish is published every 2 weeks and the local people are lapping it up as be true because it comes from an elected member of Parliament.

  11. john 3 years ago

    please comment on my post under.
    Click the image and enlarge it particular the LCOE of power total rubbish.

    • Glynn Palmer 3 years ago

      John, here is an earlier response from Renew economy to your question.

      I can understand George Christensen’s motivation to promote this HELE coal power station that will emit 773kg/MWh without CCS for the next 40 years. That motivation is protecting coal mining jobs in his electorate and absolutely no interest in protecting the planet for future generations.

      • john 3 years ago

        It is pure and simple FUD with false figures given to support an ideological attitude.
        As to miners the coal mine will be adjacent to a HELE plant usual method of delivery is by conveyor.
        There will be very small number of miners needed as autonomous trucks are the norm now.
        Undoubtedly the actual workforce will be supplied by the likes of workpac for instance.

  12. john 3 years ago

    Perhaps this link is of interest.

    Using High Voltage Direst Current which has been covered here at times in fact I refer to RenewEconomy in a comment.
    So yes lets build as many large plants as possible all over Australia and link them with HVDC and back up with storage where it is possible and we will see a huge drop in energy price.
    Selling the transmission system has to be one of the dumbest ever moves by the moron’s we elect.

    • solarguy 3 years ago

      Ah, but wait there will be more from the moron’s yet to come!

  13. RobertO 3 years ago

    Hi All, More than anything we need a long term plan by the Fed Gov (or change the Fed Gov). One advantage with HVDC is that we can use a smaller voltage on a large rated cable until we need to upgraded (Build or lay a 500 Volt cable but use it at 275 Volts until we need the 500 V and it’s about 4 times the capacity ). If it’s built through a CRE zone then we can add new RE to it (but it takes a plan to do this). State interconnects take about 3 to 5 years minimum to approve and build. They need to be started sooner, not later. Interconnects are more for reliability rather that security. We still need storage both stort and longer term, batteries and PHES (good point about PHES it can be both short and long term storage)

  14. RobertO 3 years ago

    Hi All, I worder how much this is going to upset the Gentailers, now that another compeditor has both entered the marketplace and has got it’s first major customer, and plans of doing in RE (where possible). Equal to 200 MW Wind and Solar (there more that that currently under construction in SA and add in Batteries (all types and they do not need to be all that large to cause Gentailer issues of no more over bidding of wholesale prices say 5 MW/10 MWhr upto say 50 MW /100 MWhr or PHES system of 200 MW with 1200 MWhr storage or 250 MW with 1000 MWhr storage).

  15. Robert Comerford 3 years ago

    Please get all these contracts signed and sealed before the next SA election.
    Unfortunately voting is not confined to those who can prove they can think past the next promised tax cut.

  16. saugato mukerji 3 years ago

    The real cleverness is in using the collective long term purchasing power of $75/MWH ( 7.5c/Kwh ) to fund the construction of dispatchable renewable energy. Banks and other lenders will finance projects with a guaranteed customer and a reliable income stream.This is a real win win because there is no risk to the tax payer as $75/MWH is market competitive and no payment needs to be made if the contracted renewable energy is not supplied or is not required.
    The other states would do well to emulate this innovative funding model.

  17. Gregory J. OLSEN Esq 3 years ago

    Great news!! 🙂

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