Leading utility TRUenergy says it is confident that it can win the revised tender for the Solar Flagships program, saying that it had re-submitted its application with a “significant” reduction in costs.
TRUenergy teamed up with US solar giant First Solar to propose a 150MW solar plant near Mildura, known as the Mallee Solar Park. It was one of four shortlisted projects but missed out when the government appointed panel chose the $930 million Moree Solar Farm project instead.
However, after Moree Solar failed to gain a power purchase agreement and banking finance, the tender has been reopened for all the shortlisted candidates, and all have resubmitted. And all claim that they have included significant reductions in their costs, following the sharp falls in the pricing of solar modules in 2011.
Ross Edwards, the head of business development at TRUenergy, who is responsible for all project development, both thermal and renewable, said he believed the company was well placed to win the re-tendered program, in which AGL is also competing with its own project with First Solar, along with a separate bid from Suntech and Infigen Energy, and the Moree Solar consortium which now includes FRV, Pacific Hydro, and Acciona.
“We’re pretty excited about that opportunity and we were pretty disappointed we missed out the first time round,” he told RenewEconomy in an interview. “We’ve kept that project progressing and think we are in a pretty good position for the second attempt. With the support of the Victorian government and the Commonwealth, we think it is a great opportunity.”
Edwards said the company’s proposal was “significantly lower than our original one” but would not go into details. But he said it was a good time to be sourcing PV panels and modules in the current global market. However, he said it was important that more solar was deployed to bring down the balance of system costs.
“It’s a very good time in global supply/demand outlook for panel pricing, and I think one of the key things that will determine long-term viability of large-scale solar and whether or not it can compete against wind is not the panel prices, because they have become a commodity and are getting cheaper at an unprecedented rate, it’s how much does it cost to install it and build things on scale and size.
“I think that balance of plant and construction cost will probably drive the economics. There’s equipment suppliers out there making there panels… for a lot less than $1/watt now, and it couldn’t be more competitive I don’t think.”
However, Edwards said the company was not yet considering other projects – or tenders such as the ACT solar auction – because it was focused on the Mallee project.
He agreed with industry forecasts that solar PV could be competitive with wind in the second half of the decade, “but it’s contingent on panel prices continuing to improve, in efficiency and cost, and the construction costs coming down. It’s clearly not competitive yet, otherwise we wouldn’t need the solar flagships, but it has been coming down at a rapid rate, and will it keep coming down at that same trajectory.
“You’re almost seeing supplier selling at close to or below marginal cost. It’s clearly an oversupplied market, and there will be a shakeout. There will continue to be more of these companies either consolidating or not progressing any further.”
Apart from the Mallee Solar project, Edwards says that TRUenergy has been focusing on the residential rooftop market.
