The Uterne solar PV plant in the Northern Territory’s Alice Springs may be miniscule compared with its European and US counterparts, but the project – a product of the federal government’s $94 million Solar Cities program – has gone a long way to proving the viability of large-scale solar in Australia.
The Solar Cities team does not shy away from describing the 1MW plant – supported by $3.3 million in federal funding – as iconic. It is the third solar project to be installed in Alice Springs after the 304kW Crowne Plaza facility and Alice Springs Airport 235kW installation and remains the biggest solar tracking plant in Australia.
Uterne, which means “bright sunny day” in the local Arrente language, certainly appealed to local utility Power and Water Corporation, with which US developer SunPower negotiated the power purchase agreement (PPA). So much so the utility has expressed an interest in doubling its off-take from Uterne.
The project’s tracking technology means 3000-plus panels mounted on 254 arrays can generate electricity for a larger part of the afternoon peak. Furthermore, being located in outback Australia, where scale does not justify building a coal-fired power station, Uterne is displacing relatively expensive gas-fired power.
“On a national and international scale, 1MW is admittedly small, but on the Alice Spring grid it’s 1 per cent of consumption and in terms of meeting peak daytime demand and lessons learnt it’s massive,” Solar Cities’ Alice Springs general manager Sam Latz told RenewEconomy at the Solar Cities conference in Brisbane this week.
Importantly, the 1MW project has proved to be eminently bankable, having been acquired earlier this month by Epuron, backed by finance from Commonwealth Bank – the first time a major Australian bank has provided project financing for renewable energy.
The $6.6 million project took three years to complete, but impressively took only 8 weeks to build.
“The biggest part of getting any large-scale solar project off the ground is the negotiations – the red tape, the legal processes and associated negotiations. The actual construction is getting cheaper and cheaper and faster and faster,” Latz said
“Australia must invest in streamlining the process of negotiating a PPA and all the legalities around it,” he added.
“The big barrier now is getting the funders to properly assess risk. They shouldn’t just add X per cent because solar is an unknown quantity. Let’s get to a position where the risk is quantified to reduce the risk premium. That’s the big issue now, for these large solar projects – reducing the risk premium,” Latz said
Power and Water were able to offer a higher price per kilowatt hour than generators would get elsewhere on the Australian network and the utility wanted to source its LGCs under the RET legislation from local providers.
Now the utility has expressed an interest in doubling the size of Uterne, Latz said. “If they do go ahead it will certainly be quicker,” Latz said, “because it’s just a matter of lining up the capital.”
Uterne, completed in July 2011, was the first PPA-backed utility-scale in Australia. It has since been superceded by the 10 MW Greenough River project in Western Australia co-owned by Verve Energy and GE Energy Financial Services.
Alice Springs is one of seven cities participating in the Solar Cities initiative, which runs until July 2013.
Since 2006, each city has trialed a combination of technologies, including solar hot water and PV technology, energy efficiency, load management, smart meters and cost-reflective pricing in large-scale grid-connected urban sites.
So far, the success of Solar Cities has largely passed under the radar, admits Malcolm Thorp, director of the Solar Cities team.
“Up until now, while those trials have been going on, we really haven’t had a lot we can talk about that has tied it all together,” he told RenewEconomy.
The program is in its last 12 months and the team is putting together a closure strategy that involves working closely with the CSIRO. The organisation will provide analysis of some of the findings and publish a report in the first half of next year.
“The CSIRO will look at the results from a quantitative perspective and determine which intervention worked and which did not,” Thorp said.
The federal government stumped up $94m for the program, but Thorp estimates the consortia involved in the projects put up the same again.
“They really have got a bang for their buck in terms of what they’ve done in garnering consumer support for energy efficiency and renewable energy,” he said.
Will there be a Solar Cities 2?
“There are a lot of lessons that can be utilised, certainly,” Thorp said. “We’ve had a program that has worked, so let’s look at future programs in terms of how Solar Cities has been run as a model.”
“There may be an opportunity [for Solar Cities 2], but we’ll cross that bridge when we come to it. I think it represents a pretty exciting future,” Thorp said, who expects Coalition support for programs that encourage direct action.