ACT solar power plant 'makes federal government scheme ineffective'

Australia's largest solar power farm is being built in ACT after a reverse auction process - and one industry commentator suggested it could result in the federal government getting egg on its face.

The contract to build the structure, which will be based near the hamlet of Royalla, south of Tuggeranong and will have a capacity of 20 megawatts (MW), was won by Spanish firm Fotowatio Renewable Ventures (FRV) last week.

But Giles Parkinson, editor of Reneweconomy.com.au, stated in an article for the Australian that the utility-scale project could embarrass the federal government.

"It makes the federal government's Solar Flagships program completely ineffective," he claimed, adding that the cost put forward by FRV last week has undermined official estimates of how expensive solar technology is.

And there's more. Giles said the price of the winning bid also beat some industry calculations - with the proposal shocking some insiders.

He said that it would appear the government was already backtracking on previous comments regarding the solar industry.

"It was interesting to note federal resources minister Martin Ferguson pointing to a glowing future for solar PV when discussing the failure of the contracts for closure scheme earlier this week," the editor stated.

"Less than a year ago, the government's official forecast in the draft white paper was for solar PV to reach 22 cents a kilowatt hour sometime around 2035."

The Bureau of Resources and Energy Economics (BREE) already confirmed last month that this price has already been reached, but the FRV bid seems to have smashed this data as well.

According to Giles, the project's adjusted price seems to be around 15 cents per kilowatt hour by 2014, which takes into account a fixed tariff paid to the government for 20 years.

It isn't the first time Parkinson has played down the BREE stats, having previously noted in an article for Energy Matters that specialists believe solar energy is way more lucrative than outlined by the government agency. 

Not only that, but ACT is hardly known for its solar resources. Giles claimed that western New South Wales, South Australia and Western Australia has the potential to reduce these numbers even further.

However, the expert admitted speed is of the essence - as the ACT will not want its chance at grabbing the solar throne thwarted by ongoing efforts elsewhere in the country.

If the state energy minister Simon Corbell can complete the plant before a flagship 159 MW facility can be built in NSW, Giles argued, then he will have accomplished in three years what the entire commonwealth has been unable to do up until now.

Posted by Mike Peacock

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