$650m SA solar thermal project scrapped for want of funds
South Australian solar thermal project abandoned because it couldn’t attract the required investment.
A $650 million renewable energy project that was supposed to symbolise South Australia’s move away from “dirty coal” has been abandoned because its proponents could not attract the required investment.
US-based SolarReserve’s proposed 150 megawatt solar thermal plant near Port Augusta, 310km north of Adelaide, formed a key part of the then Weatherill government’s response to the 2016 statewide blackout.
Announced in August 2017 and propped up by $110m of federal funding that was negotiated by Nick Xenophon as part of his support for the Coalition’s company tax cuts, the plant was to supply the state government’s energy needs for 20 years.
The project was to create 650 jobs during construction, 50 ongoing jobs and be operational by next year. After several delays, it was confirmed yesterday that SolarReserve would not secure finance by the May 31 cut-off.
It is understood the company recently attempted to rework the contract to make the project more financially viable.
The state Liberal government, which took power 12 months ago, will now put the contract out to tender again.
Energy Minister Dan van Holst Pellekaan said the government had given SolarReserve “enormous support”, including extending timelines and introducing it to potential investors. Federal Energy Minister Angus Taylor said funding for a new proponent remained possible provided the business case stacked up.
Greens senator Sarah Hanson-Young called on the state and federal governments to jointly fund the entire project because “a publicly owned solar thermal plant would be a boon for jobs at a time when they are desperately needed in our state”.
Several attempts to contact SolarReserve were unsuccessful.
SolarReserve operates a plant in Nevada similar to the one proposed for Port Augusta. The Crescent Dunes facility has experienced operational issues that at one stage saw it go offline because of a leak in the molten salt tank.
Energy analyst Tristan Edis said this would have made financiers “nervous”, while energy transition expert Simon Holmes a Court said “these mega solar thermal projects are very challenging to finance at this point in their maturity”.
Grattan Institute energy program director Tony Wood said he was not surprised the deal had fallen over. He said the “tide was turning” against solar thermal as other clean energy options, particularly solar PV and battery storage, became more cost-effective.
“It seems to be more to do with the circumstances in the market in which they’re preparing to build this project rather than issues with SolarReserve,” Mr Wood said.
The plant would have seen concentrated solar thermal technology harness the sun’s power to generate electricity by using lenses and reflectors to concentrate sunlight, heating molten salt to produce steam to drive a turbine.
It was expected fill a void in Port Augusta after its coal-fired Northern power station closed in 2016, largely because of the rapid rise of renewables in South Australia. The coal plant’s closure resulted in the direct loss of 185 jobs and sent power prices soaring.
Former premier Jay Weatherill, seen by many as a pioneer because of his staunch advocacy of renewable energy, last year said: “Port Augusta is a symbol of South Australia’s transition from old to new.”
SA Labor leader Peter Malinauskas blamed the project’s demise on the Liberals’ plan to build an interconnector with NSW. “They are prioritising NSW dirty brown coal power over South Australian renewable energy power,” he said.
The SA government has a contract in place with SIMEC Energy to supply electricity until November 2020, with an extension option in place.
Additional reporting: Perry Williams