UK solar firm challenges Australian utilities with big solar plans

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A leading UK-based solar farm developer has received approval for its first 140MW solar farm in Queensland, and intends to bypass Australia’s major electricity utilities and sell the output from its growing portfolio of projects to the spot market.

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Large wind and solar farms can be planned and built in 2-3 years (compared with 10-15 years for nuclear) and are ready now to replace fossil and nuclear electricity. Photo: Brookhaven National Laboratory via Flickr (CC BY-NC-ND)
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A leading UK-based solar farm developer has received approval for its first 140MW solar farm in Queensland, and intends to bypass Australia’s major electricity utilities and sell the output from its growing portfolio of projects to the spot market.

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Eco Energy World Australia says it received planning consent last week for the Aramara solar farm near Maryborough, on Queensland’s Fraser Coast.

But it won’t be waiting for a contract, or power purchase agreement from a utility; instead, it intends to begin construction within a few months and sell the output directly to the market.

“We have a unique proposition, where our projects are based on a merchant income model and therefore the projects are not delayed by PPAs,” says EEW chairman Svante Kumlin.

And he intends to take a similar model to a pipeline of 1GW of large-scale solar projects, of which 440MW are in various stages of planning. All of them are in Queensland.

The move by EEW represents a step change in Australia’s renewable energy markets.

With a few exceptions, large scale renewable energy projects have only been developed in Australia with a long term PPA from a major utility, and little has been developed in recent years because the utilities have been on an effective capital strike, citing the changes and ongoing uncertainty in government policy.

Indeed, almost all the projects that have begun construction in recent years – possibly with the exception of the 175MW wind farm owned by China wind giant Goldwind – have been from contracts handed out by the ACT government, in its drive to source 100 per cent of its electricity needs from renewable energy by 2020.

But the game is changing because that capital strike is putting Australia behind its legislated federal target of 33,000GWh by 2020, in turn pushing large scale certificates up to more than $80/MWh.

This is the opportunity that Kumlin wants to seize. “Our long-term view of the market that it is financially viable to go merchant. If you look elsewhere in the world that is what happening. And that is what going to happen in Australia,” he told RenewEconomy in an interview.

Kumlin says PPAs are scarce and will simply delay the project. “There is a time race to take advantage of the LGCs.”
He is confident that banks will finance such projects, although he concedes that the first project, Aramara, may have to be funded with equity. “We seen in last few months increased appetite from financial institutions to finance merchant. that will come through, but it is possible this project will be all equity.”

The other factor working in favour of large scale solar projects is the rapidly falling cost of the technology. A glut of panels next year is expected to bring module prices as low as 30c/watt and balance of system costs are also falling in Australia, thanks to the recent tender by the Australian Renewable Energy Agency.

EEW’s initiative suggests that for many that subsidy is no longer required. Another developer, WA-based Sun Brilliance, is proposing a 100MW solar farm in WA’s wheat belt, constructing it on similar merchant terms.

Kumlin is clearly sitting on a near term opportunity. As more solar farms are built, the price of LGCs is likely to fall, and if too much solar is built, then the price of electricity in the daytime may also fall. But Kumlin says his modelling shows there is a big enough opportunity.

EEW set up in Australia last year, after building a large portfolio of 20 projects in the UK, which briefly challenged for being the biggest solar market in the world, although the Tory government has since turned its focus to more expensive nuclear and controversial fracking.

“We have been very successful in the UK market, and we know it began in the same way the Australian market is today”.

It has five projects in Queensland in various stages of planning, and another 560MW of projects in the pipeline. All are in Queensland, which Kumlin says has no shortage of land, rising demand, great solar resources and a strong grid>

“We are so pleased for the Aramara area and the Fraser Coast Region,” Kumlin said in a statement.

“This project will increase the utility solar generation by 140MW and will create new opportunities for the community including a large number of jobs and services.”

The solar farm will be built using single axis tracking technology. It is being built on a cattle farm.

 

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17 Comments
  1. Kenshō 3 years ago

    Bypassing utilities and their dragging feet sounds exciting. Great to have another experienced solar farm developer interested in bringing more RE to the market in a new way. I really hope they reduce the long runs of poles and wires and situate the solar farms close to suitable size population centres, creating additional reliability for those communities. Additionally, if the model tackling the spot market works well and banks become comfortable, is it possible to ratchet up the ambition to include selling PV/storage Wh’s on the spot market?

  2. Kenshō 3 years ago

    If the model tackling the spot market works well and banks become comfortable, is it possible to ratchet up the ambition to include selling PV/storage Wh’s on the spot market?

    Even if it’s too early for these projects to add storage, is it possible they be located on the community side of a substation, so they can still provide the community daytime power if the larger regional grid goes down with wind, flood or fire? At least the community would have some daytime power to top up water reservoirs and mobile phone tower batteries, get some sewerage pumped and for emergency services to more easily fix problems having power during the day.

    Another reason for locating the PV close to an existing substation, is when it is inevitably decided to add battery storage to the substation like this project where Tesla is being selected “to provide a 20 MW/80 MWh Powerpack system at the Southern California Edison Mira Loma substation.”
    https://reneweconomy.com.au/2016/tesla-wins-contract-largest-lithium-ion-battery-storage-installation-world-61917

    • David Hall 3 years ago

      I don’t think banks will ever become comfortable in financing these kind of projects without the borrower providing acceptable PPAs. Going merchant makes a lot of sense as you usually get a higher revenue than that available from a PPA, where the provider of the PPA is looking to make a profit out of it.

      Our big gencos could easily go merchant on renewable projects but they are still happy to continue sitting on their hands.
      Who knows, this may change if more off shore developers step into the market as the big gencos cannot afford to loose market share.

      • Kenshō 3 years ago

        heh mate on the surface I accepted your concern for banks wanting certainty though based upon this youtube clip explaining the spot market, what I get is solar bids low and then settles on the highest price all the old generators get. So as far as I can see, the solar farm should have the market sewn up guaranteed!

  3. howardpatr 3 years ago

    This nedds to be referred to Cayman Turnbull – he might have information that this could lead to more devastating cyclones?

    The ABCs Chris Uhlmann might get the privalage of revealing the enlightening information.

  4. John Saint-Smith 3 years ago

    “All are in Queensland, which Kumlin says has no shortage of land, rising demand, great solar resources and a strong grid.”

    I’d like to believe that in addition to the resources, there was also some planning associated with the addition of all new solar, wind and other renewables to the existing grid, at least at the State level, if not the Federal. All intermittent power generation systems require the stabilizing back-up of gas, biogas, pumped hydro or batteries. A free-for-all market does not deliver that coordination. An existing monopoly fossil fuel grid operator who refuses to embrace renewable technology will not cooperate without government direction.
    Unlike South Australia, Queensland has a good deal of relatively young, efficient coal generation which could be successfully integrated into the new grid and progressively switched off as the renewables are bedded in.

    But in the absence of any planning and coordinating leadership, I fear that we might have the wrong power mix and precisely the problems that Turnbull and Co have predicted.
    However, such is the childish intransigence of the climate denialist/coal lobby group in our national government, I fear that they will refuse to provide that leadership, sit on their hands and smugly tell us, “I told you so”, when it all becomes messy and inefficient.
    How long before the foreign (and domestic) investors just throw up their hands and cut their losses and ties with this once ‘lucky’ country?
    “I met a man who built a boat,
    to sail away,
    and it sank.”
    I never thought it would end like this.

    • Carl Raymond S 3 years ago

      A coal fired power station is several things. Boilers, turbines, generators, grid hub. Only the coal fed to the boilers has become taboo. The rest can still live a useful life if a sustainable way to produce the steam can be found. One way is biogas (from sewage). Another option is to use wind/solar power to heat a massive insulated cavern of rocks, then use the hot rocks for steam when demand requires. Siemens are working on this.
      Unfortunately, those coal plants, regardless of newness or efficiency, do have to lose the coal. Better to waste a perfectly good boiler than to waste a perfectly good planet.

      • David Hall 3 years ago

        Looks like the Brits are showing us the way on large solar PV in Aus. They also have coveted some of the big coal fired PS boilers to burn waste wood. However, a typical coal fired PS boiler is ~650MWe which equates to one hell of a lot of waste wood!

        • Carl Raymond S 3 years ago

          Beware of green washing. Waste wood for the cameras, VIP visitors and marketing materials. Coal at other times. 100% RE or bust.

  5. Carl Raymond S 3 years ago

    I read this report with great excitement, on the surface it signals an unstoppable renewables snowball. Simultaneously I feel fear and trepidation – that the Feds will immediately begin work on a policy to block this type of rapid deployment of renewables. Anybody with a stake in the future needs to be on the lookout. If Turnbull et al move to put the brakes on renewables in any way, shape or form, we need to call them out – loudly.

    • Kenshō 3 years ago

      Interfering with the free market would be against their own political platform and raise awareness around any attempt to bolster private investments or funding for their political party. That would possibly land them in the Federal Court of Australia. Looks like grid reliability is also becoming an election issue.

  6. Kenshō 3 years ago

    Ullmann is at it again on the ABC trying to leverage a letter from Koutsantonis. Someone needs to find out where this concern with “synchronous” generators is coming from. Wind can be configured any way an engineer determines. Wind can offer FCAS. Solar can offer FCAS. The fact is, adding storage to wind and solar offers far superior FCAS than any fossil fuel generator because mechanical generators have inbuilt inertia, whereas the inverter getting power out of a battery ramps up and down at almost instantaneous speed limited only by the speed of electrons and electric fields building. The whole argument seems constructed on false logic that fossil fuel is synchronous and RE isn’t. My inverter/charger synchronises with the grid and can generate it’s own stable voltage amplitude and frequency from a battery. Just fix the grid rules so storage can be added and stop the bullshit and whinging.
    http://www.abc.net.au/news/2016-10-04/electricity-security-complex-in-sa-says-koutsantonis/7899302?section=environment

    From the little reading I did, the only reason some wind generators were originally called “synchronous” in comparison to “asynchronous”, is asynchronous were more efficient because they don’t have a direct drive from the blades to the frequency generation. Decoupling the mechanical blades from the electrical side merely makes the wind generator more efficient. This has nothing to do with grid security or reliability of output which is determined by the control circuitry and whether the wind turbine has storage added. The wind turbine itself does not have any inherent disadvantage and nor does solar. A fossil fuel generator has the same intermittency as wind or solar when fuel isn’t shovelled into its turbine. Whereas fossil fuel needs coal and gas continually shovelled in, wind and solar need the provision of storage. That’s it. End of debate.

  7. Kenshō 3 years ago

    Think about this way Uhlmann… In Australia’s history, Australians used wind turbines to pump water into a header tank or pump electricity into a battery. Did anyone assert the products of wind energy were inherently intermittent???

  8. Kenshō 3 years ago

    Difference between configuration of contemporary Asynchronous Model Wind Turbines and Synchronous Model Wind Turbines:

    “So for a given synchronous generator designed with a fixed number of poles, the generator must be driven at a fixed synchronous speed to keep the frequency of the induced emf constant at the required value, either 50Hz or 60Hz to power mains appliances. In other words, the frequency of the emf produced is synchronised with the mechanical rotation of the rotor.”
    http://www.alternative-energy-tutorials.com/wind-energy/synchronous-generator.html

    And:

    “On the page about the synchronous generator we showed that it could run as a generator without connection to the public grid. An asynchronous generator is different, because it requires the stator to be magnetised from the grid before it works.
    However, an asynchronous generator in a stand alone system can be used if it is provided with capacitors which supply the necessary magnetisation current. It also requires that there be some remanence in the rotor iron, i.e. some leftover magnetism to start the turbine. Otherwise a battery and power electronics will be needed, or a small diesel generator to start the system.”
    http://mstudioblackboard.tudelft.nl/duwind/Wind%20energy%20online%20reader/Static_pages/asynchronous_generators.htm

  9. Kenshō 3 years ago

    What appears to have happened is mechanical engineers in the fossil fuel industry or Uhlmann have jumped to the conclusion that due to the asynchronous nature of wind turbines they cannot synchronise with 50 Hz in the absence of a grid and stop. In fact the synchronousness or asynchronousness of a wind turbine has nothing to do with grids at all and depends on blade speed being physically a direct drive relative to frequency output. The asynchronous wind turbine decouples the mechanical from the electrical and is therefore superior in placing less tension on blades. Furthermore the model and design of the asynchronous wind turbine determines whether it is primarily designed to function with an active grid or keep functioning without an active grid or be able to start itself or all the above.

  10. Kenshō 3 years ago

    What appears to have happened is mechanical engineers in the fossil fuel industry or Uhlmann have jumped to the conclusion that due to the asynchronous nature of wind turbines they cannot synchronise with 50 Hz in the absence of a grid and stop. In fact the synchronousness or asynchronousness of a wind turbine has nothing to do with grids at all and depends on blade speed being physically a direct drive relative to frequency output. The asynchronous wind turbine decouples the mechanical from the electrical and is therefore superior in placing less tension on blades. Furthermore the model and design of the asynchronous wind turbine determines whether it is primarily designed to function with an active grid or keep functioning without an active grid or be able to start itself or all the above.

  11. Kenshō 3 years ago

    In summary, contrary to grid operators or politicians. Australia doesn’t need synchronous wind turbines. It appears to need the correct model asynchronous wind turbine suiting our grids evolution.

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