Vast secures funds to advance Australia’s first big solar thermal project and local manufacturing

Australia’s Vast Renewables says it has now secured nearly half of a promised grant from the federal government’s renewable energy agency as it advances work on building manufacturing capacity for its solar thermal technology and preparing for the country’s first large scale solar thermal project.

The $30 million funding agreement announced on Tuesday is part of a $65 million funding deal from the Australian Renewable Energy Agency announced by federal energy minister Chris Bowen in early 2023.

“That was the first brick in the wall,” Vast CEO Craig Wood told Renew Economy on Tuesday. “We have had to finish the engineering, costing and contracting for the manufacturing of the gear that we will make in Australia. We had to have all that in place before we could pull down the funding.”

The company is now working to get to financial close – planned in early 2025 – for a 30 MW solar thermal project with eight hours of storage (240 MWh) in Port Augusta, and an accompanying solar methanol plant, in what would be the first large scale solar thermal project in the country.

There have been several false starts for the technology. A much bigger solar thermal project put forward by the US-based Solar Reserve for Port Augusta fell apart after that company went bankrupt, and Vast still hopes to tap into the offer of $110 million of concessional finance from the federal government made available for that project.

The second $35 million tranche of funding from Arena will help. It also hopes to draw on the resources of French nuclear giant EdF, which has invested €10 million into Vast itself and may also become an equity partner in the Port Augusta project, which is expected to cost between $360 and $390 million.

The news came as the CSIRO also announced a record capital raise for its own solar thermal technology, fuelling hopes that the day of solar thermal may finally arrive in Australia, after more than a decade of promise that got sideswiped by the plunging cost of solar PV.

See: CSIRO spin-off raises record amount to fund solar heat and power tech, get industry off gas

Wood says several factors are playing towards solar thermal – including its own cost reductions, its relative low cost long duration storage essential for high renewable grids (particularly those with no pumped hydro), the demand for solar heat and the promise of adjacent technologies such as solar fuels, including methanol.

Wood says solar PV and battery storage has dominated the market for grids with up to 60 to 65 per cent share of wind and solar. Beyond that, long term storage is needed.

“Solar thermal is the cheapest solution, particularly if you don’t have water (pumped hydro),” Wood says. “And nothing makes green heat as cheap as solar thermal.”

Wood says EdF is interested because, despite its focus on maintaining France’s nuclear fleet, it has a big commitment to renewables, and has expertise – from its nuclear facilities – in the use of sodium as a heat transfer fluid. (Sodium is used in some nuclear reactors as a coolant).

Wood says Vast is well placed to advance its project, despite its recent eye-watering loss caused by non-cash write downs and the cost of listing in the U.S., where it hopes to tap into capital markets.

Its long term plan is not to be a developer – it wants to be a manufacturer and licensor of solar thermal technology such as heliostats (mirrors), receivers and control systems – but it needs to build a “first of its kind” scale project (beyond the demonstration scale Jemalong project pictured above) to attract buyers.

“Unlocking this funding helps accelerate our Australian green technology manufacturing and the final stages of development for our first utility-scale project,” Wood said in an earlier statement.

“Arena’s backing has been pivotal, getting us to a point where we are garnering significant interest from investors, industry and international governments keen to explore how our technology can play a key role in decarbonising hard-to-abate sectors including electricity, industry and fuels. 

“With the continued support of the Australian Government and our investors, we are looking forward to building our next projects, and to helping Australia become an export powerhouse for this next generation of green technology.”