SolarReserve signs manufacturing MOU for solar tower project, but financing delayed

US solar company SolarReserve has signed a memorandum of understanding with local South Australian outfit Heliostat SA, to manufacture and assemble the heliostat components for the world-leading 150MW solar tower and molten salt storage facility proposed for Port Augusta.

The agreement will see the two companies work together on the supply, fabrication and assembly of more than 12,800 of SolarReserve’s proprietary SR96 heliostat assemblies for the Aurora project, which was last priced at around $750 million. Heliostats are like mirrors that reflect the sun and direct it to a receiver on the top of the tower.

The MOU, announced on Tuesday, is the first sign of progress on the massive project since January, when the company was granted development approval for Aurora, and opened its Australian HQ and a field office near where it will build a 150MW solar thermal power plant.

SolarReserves’s Aurora proposes a 150MW solar tower with eight hours of storage, which would make it the largest such facility in the world – another feather in the renewable technology cap of the former Labor state government, alongside the Hornsdale Big Battery.

The solar thermal power station will work by using large tracking mirrors to follow the sun throughout the day and reflect and concentrate sunlight onto a molten salt receiver, which stores the energy in the form of heat.

According to SolarReserve, each of the 12,800 assemblies includes 96 square metres of glass, plus steel supports and electric drives, resulting in a field of mirrors with more than a million square metres of surface area.

The company said the deal with Heliostat SA, alone, would create close to 200 jobs for the region, with the entire project expected to employ 650 people full time, during construction.

“We’re excited to have formed a long-term partnership with Heliostat SA and look forward to teaming up with them to bring manufacturing of our world-class heliostats to South Australian workers,” said SolarReserve CEO Kevin Smith.

“SolarReserve is committed to supporting South Australia’s goals which will attract investment, create South Australian jobs and build an exciting and growing new industry.”

The game-changing project won the tender to supply 100 per cent of the state government’s long-term power needs over a year ago, with an amazingly low bid of $78/MWh that beat out competing tenders from gas plants.

As we reported at the time, that price was around one-half of previous estimates for the technology, and significantly cheaper than the gas generation fleet that currently supplies the other half of the state’s generation profile, after renewables.

But the company was able to achieve it thanks to the promise of $110 million in funding from federal government, and the 20-year timeframe of the PPA with the SA government, which allows the amortisation of debt over a longer period.

And in May, SolarReserve sought approval to add a 70MW solar PV farm to the solar tower and molten salt storage facility, in a further effort designed to lower the costs for the project.

On that matter, the total cost of the project is not yet publicly known – SolarReserve says it has firm numbers, but has not fully negotiated all contracts so, can’t release them for now.

The company had expected to lock in financing by the middle of the year and begin construction of the project in 2018, for completion in late 2020.

In an email to RenewEconomy on Monday, SolarReserve said it was nearing completion of the development activities on Aurora, and was in the final stages of running a tender process to secure an EPC construction contractor – activities necessary to be completed before financing could be concluded.

“These development activities have taken longer than SolarReserve envisaged, and despite this there remains very strong support from financiers to participate in the project, including the federal government,” a company spokesperson said.

“Financing activities are now accelerating as the development and tendering activities reach a conclusion.

“SolarReserve expects to complete financing in early 2019, which will then enable construction to commence in earnest.”