There’s been a lot of attention paid to the big boom in large scale solar in Australia over the past nine months, with more than 2.4GW under construction across the country, and another 8GW in the pipeline, by RenewEconomy’s estimates.
The focus has been on the big end of this construction boom, but something interesting is happening at the smaller end of the market – the emergence of quick-to-build, compact MW scale solar plants that are redefining the technology’s economics.
The majority of large scale solar plants are slowed down by connection issues and getting a power purchase agreement and finance. But there has been no such inhibition for YD Projects, which this week completed the first of a number of solar projects on the NSW/Queensland border.
The 4.77MW Chillamurra solar plant at Goondiwindi was built in just four months, and the next, a 10.9MW solar plant at Barcaldine in Queensland, will likely take less time.
Even more importantly, the Barcaldine project will set a new benchmark for capital costs in Australia, at just a few cents over $1/watt. This compares to the $1.80/watt achieved by ARENA in its funding round last year, and less than half the $2.20/watt estimated by Jacobs, the modellers for the Finkel Review.
And the merchant model will deliver payback to its equity investors in less than five years, meaning it matters a lot less what happens to market prices after that.
YD Projects, is the brainchild of electrical engineer, and former oil industry veteran Rob Mailler and two colleagues John Hill and Glenn Clark.
They have been looking at large scale solar for years, since before entering the ground mounted commercial solar market in 2009, with YellowDot bidding – and being shortlisted, ultimately unsuccessfully – in the ACT large solar round.
“We knew then that there would be a time in the future when the cost of deploying this technology would fall and energy prices would rise and the curves would cross and large sites would become feasible without government support” Mailler tells RenewEconomy.
That’s certainly the case now. The output from the plant will be sold at market prices, but with an LCOE of around 7.7c/kWh (defying expectations that smaller plants are more expensive due to lack of scale) Mailler expects a relatively short payback given the current prices for wholesale electricity, and for renewable energy certificates.
“The landscape (for wholesale and LGC prices) will be different in five years’ time, but our payback time is pretty quick,” he says.
“Over the next two to three years there is enough certainty to proceed. If you can return all your capital, and you have low running costs, and no fuel costs, what happens after that is less critical.”
That puts a different complexion on how the equity investors are looking at the deal. They are concerned about the IRR (internal rate of return) and that is likely to vary a lot, but it is the payback period that is consistent and most important.
One of the features of these new solar plants being built by YD Projects is a newly released frame technology known as PEG, delivered by German solar firm Belectric.
It is lightweight, easy to assemble, and because there is no need for big machinery, there is a gap of just 2cm between the rows of modules, compared to several metres in most arrays. The system achieves 1.4MWp per hectare.
That means three times as much solar can be installed compared to competing arrays, and that makes it interesting for large energy users, particularly manufacturers, who are looking to install solar “behind the meter” to manage their soaring electricity bills, and may not have that much spare land.
This adds to the growing realisation that much of Australia’s future energy development will be localised, or distributed, as per the CSIRO and ENA forecasts, and predictions by new AEMO boss Audrey Zibelman.
Mailler says the company had taken the technology to ARENA, but failed to get funding.
“There is good story here – we applied for government assistance, didn’t get it, but we persevered with it and did it anyway without support.” Ironically, the Chillamurra plant has become operational well before any of the ARENA supported projects from the 2016 round.
“Historically, the Australian government has gifted substantial grant funding to foreign solar project developers,” Mailler says.
“Hopefully, we are helping to demonstrate that Australia has the necessary people and the talent at home to do these projects so that subsidies for foreign firms can now come to an end, thereby levelling the playing field,” Mailler said.
YD Projects has developed local people and local capacity, providing a boost to the local economy and spawning new businesses.
Nir Dekel, the Australian point man for Belectric, says the idea for the sub-structure of the framing is to keep it low, dense and lightweight. “The only gaps are for walking past for maintenance.” Frames for a 1MW array can fit in one 40 foot container, and no heavy equipment is needed. Their competitors need 3-4 containers.
YD Projects’ Chief Operating Officer, Glenn Clark, says he thinks there will “be a lot more of these plants”, but it is clear that there is something similar to a gold rush to get land, and connection points. When its plant at Barcaldine is built, any further solar in the area will require an upgrade of the local grid.
“It is an active market there at the moment.”
The Chillamurra solar farm used Jinko solar panels, with Maxim DC optimisers, and SMA inverters. It was built on property owned by Mailler’s retired parents. Meralli Projects carried out the construction.
