Australia's 40MW dish project has signed off on a crucial grant, setting the utility-scale concentrated solar power project into motion. Giles Parkinson in New South Wales reports.
The 40MW solar thermal “Big Dish” project planned for the Australian city of Whyalla took a major step forward this week after the Solar Oasis consortium signed a funding deed with the Australian government for a $A60 million grant.
The deed was crucial for the project to move forward and finalise funding arrangements with equity partners and financiers. The grant was first awarded nearly two years ago under the government’s Renewable Energy Demonstration Program.
However, the deed experienced delays as the government took a cautious approach after its problems with the $1.5 billion Solar Flagships project, where the two winning tenders, the 250MW solar Dawn CLFR project sponsored by France’s Areva and the Moree Solar’s 150MW PV project both failed to secure financing.
Alex Braisier, Solar Oasis' managing director, says the consortium will likely source equity and financing from Chinese partners and suppliers, rather than Australian bankers. This is because Chinese investors are more innovative and flexible, he says.
A power purchase agreement will be negotiated with Sanctuary Energy, a small retailer focused on renewable energy. Braisier is a director of that company’s board.
Speaking to CSP Today from China, where he is negotiating the financing deals, Braisier said the funding deed will pave the way for financing to be completed, as well as agreements for grid connection and permitting. Construction is likely to start in May 2013, and will take about 30 months.
The Solar Oasis consortium comprises two development companies, National Power and Sustainable Power Partners, as well as Wizard Power, which bought the unique solar dish technology from the Australian National University, where it was originally developed.
The project will comprise around 330 “big dish” solar thermal concentrators, which each have 500 sq m of curved mirrors capable focusing energy on a receiver and capable of generating steam with temperatures in excess of 2000C.
Braisier explains, however, that the Solar Oasis project will only require temperatures up to around 600C. The temperature will be moderated with reticulated water. The higher temperatures could be exploited in future projects for activities such as coal liquification, or even hydrogen cracking.
The dishes will be manufactured and assembled on-site using Wizard Power's factory-in-the-field, although some parts will be sourced from Chinese suppliers. The project has a nominal cost of $A230 million, although Braisier said this will likely be reduced.
This is due to cost reductions in the two years since the grant was first announced, and because suppliers of power blocks and other infrastructure are now “falling over each other” to provide vendor finance in the current market. “We expect positive changes to our original estimates, and also because of our developing relationship with Chinese partners,” he adds.
Braisier says the consortium sees the plant as a “peaking plant”, delivering energy during the day and into the evening peaks. The industrial city of Whyalla, in the state of South Australia, has one of the richest solar resources in the country, but has relied almost entirely in the past on coal-fired generation.
Braiser says the plant will not have storage, but may be augmented by a small gas-fired plant to ensure dispatchable supplies. “That could further improve the IRR,” he said, adding it may also construct a 5MW solar PV plant with one of its Chinese partners.
Wizard Power’s Artur Zawadski says the sealing of financing for the Whyalla project will also be crucial for its efforts to sign contracts overseas. One of the most prospective markets is India, which is tendering for projects under its National Solar Mission initiative, which aims to have 22GW of solar power installed by 2022.
Zawadski says any bids into that scheme are limited in size to twice the capacity of a project that has reached financial closure elsewhere. Zawadski describes India as a prospective, high growth market. He also notes growing interest from China in CSP technology, and also sees opportunities in the US, southern Europe and North Africa.
“Most of these overseas opportunities are largely dependent on the first project going ahead in Australia,” he says.
Braisier adds that there had been interest in the technology from mining groups, who in Australia have to pay $300/MWh or more for either diesel fuel, or gas fired generation in remote areas. “We think there will be a lot of applications for the technology.”
Giles Parkinson is a regular contributor to CSP Today and is editor of RenewEconomy.com.au
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