Victoria independent renewable energy advocate, Simon Corbell, has predicted a strong industry response to the state’s first large-scale renewable energy auction, and “extremely competitive” bidding, as wind energy prices sink to the mid $50s/MWh.
Speaking at the opening of the Clean Energy Council’s 2018 Wind Industry Forum in Melbourne on Wednesday, Corbell said the 650MW reverse auction scheme (Australia’s largest) was well underway, and likely to be dominated by bids for increasingly cheap wind power generation.
“We now have the Victorian Renewable Energy Auction Scheme underway, including 550MW in a tech-neutral round, which would be fair to say will be dominated by wind energy generation proposals.”
(The auction reserves 100MW of capacity for solar projects).
“Whilst I’m not able to disclose to you any of the metrics or any of the proposals that have been brought forward to date, it’s very clear that interest from the market has been extremely strong, and bidding will be extremely competitive,” he said.
“It is my hope, as the Victorian renewable energy advocate, that the outcomes from this auction will be so compelling as to convince the naysayers that these programs are well worth continuing, and that future auctions will subsequently be committed to by the state government,” he told the forum.
Corbell said that increasingly cheap wind generation had been making huge headway in the Australian energy market, driven not just by state government schemes like reverse auctions, but by corporate PPAs.
“We have seen cost-competitive wind really making its mark in the market, as more an more businesses – large, but also medium and small commercial industrial customers – look to move away from their price exposures from both the retail electricity market and the retail gas market,” he said.
“Long-term contract prices are now sitting in the mid $50/MWh. Compare that to the results from the remarkable Hornsdale project just a couple of years ago, that were in the mid-$70/MWh.”
Corbell said the current Victorian reverse auction highlighted, again, the importance of building and maintaining a pipeline for wind energy development, in Victoria and across the country.
“There’s no doubt that the development of wind energy in the state of Victoria has gone ahead in leaps and bounds over the last 12-18 months,” he said.
“At the end of last year, there was just over 1,500MW of large-scale wind operational in Victoria… (with) was another 221MW due for completion.
“But more importantly, there was nearly 3,000MW – 2913MW to be precise – that was permitted and proceeding through the late-stage development pipeline.
“Of that, nearly 1000MW is expected to commence construction this year alone,” Corbell said.
“So from very much a standing start a couple of years ago, the level of investment and development in the Victorian NEM region has been very, very significant.”
What has been underpinning and driving that growth? Largely state government policy, he says.
“The 30MW Kiata Wind Farm, which has now been developed by Windlab, up and operational, and the 132MW Mt Gellibrand Wind Farm being developed by Acciona, are two great examples of how state government purchasing has underpinned the development of wind in Victoria.
“That type of long-term certainty is what is critically important in our industry moving forward,” he said.