South Australia puts energy contract out for tender after failure of solar tower

The South Australia state government has re-launched its search for a new electricity supplier after being forced to go back to the market following the failure of the much-touted solar tower and molten salt storage project in Port Augusta.

The contract with US company SolarReserve was cancelled by South Australia earlier this year after the company failed to get finance.

SolarReserve  is facing more problems after the Nevada state utility also reportedly pulled its contract with the ground-breaking 110MW Crescent Dunes facility for its failure to deliver on production targets.

On Thursday, state energy minister Dan van Holst Pellekaan issued a request for proposals for the supply of 100 per cent of the state government’s electricity needs, which amount to around 500 gigawatt hours a year and includes office buildings, police stations, schools and hospitals.

“The Marshall Government’s priority is a contract that delivers lower cost electricity whilst improving competition in the South Australian energy market and reducing pollution,” van Holst Pellekaan said in a statement.

“The State Government’s electricity contract represents an opportunity to deliver more affordable, reliable and cleaner electricity in South Australia whilst securing the successful bidder’s long term future in this state.”

The RFP allows for proposals for retail contracts, the construction of a new generating plant or combinations that meet the state’s requirements.

The State’s procurement objectives are: the supply of electricity for 100 per cent of the government’s electricity load; the lowest cost to SA Government; and improved innovation and competition in wholesale and retail electricity markets in South Australia.

The RFP will be the first of a two stage process that will see shortlisted respondents invited to respond to a selective Request for Tender (RFT) in the first quarter of 2020.

The state government currently has a retail electricity contract with Simec Energy Australia, majority owned by UK steel billionaire and Whyalla steelworks owner Sanjeev Gupta, which lasts until October 2020, with a provision to extend until 2021 if needed.

The state government uses about 405GWh from large sites, another 66GWh from small sites and a further 27GWh from un-metered street lighting. It says it will accept proposals for less than 100 per cent of its electricity needs if they represent good value for money, and fit in with emissions criteria.