Industry awaits dawn of federal solar project

THERE is a lot riding on the  $1.2 billion Solar Dawn energy scheme in Queensland.

Industry awaits dawn of solar project

IN the next few weeks, the federal government will learn whether the $1.2 billion Solar Dawn project in Queensland has been able to meet its extended deadline to obtain finance for the 250 megawatt solar thermal project.

It's sure to be a close-run thing and the solar thermal industry is looking on with apprehension.

Although opinions are divided about whether it was a good idea for the Solar Flagships scheme to plump for a project of that size to showcase new technology, or whether a suite of smaller projects with different systems would have been a more realistic proposal, there is a fear that if Solar Dawn fails, it could set the industry back years, particularly given the level of political rhetoric surrounding renewable energy and government incentives.

It would be doubly frustrating for the industry because, as a new report points out, Australia has a unique opportunity to grab a significant share of the global supply chain for solar thermal, a technology recognised by the International Energy Agency, and by various mappers of 100 per cent renewable ambitions, as crucial to the move to low and zero-carbon energy grids. It is expected to be worth $1 trillion or more if deployment forecasts come true.

Solar thermal, also known as concentrating solar power, is different from solar photovoltaics because, rather than generating electricity directly from panels, it is most commonly used to generate steam to drive a turbine, and its energy can be more easily stored. That gives it the advantage of dispatchable power crucial to balancing the fluctuating delivery of wind and solar PV energy, and the vagaries of consumer demand. It is particularly suited to Australia's spoilt continent.

It also happens that Australia is one of the leading developers of CSP systems. Later this month, the first demonstration plant of concentrated solar PV technology will be unveiled by the listed Silex Systems in Victoria, while the Solar Dawn project, and a 44MW solar booster installation at the neighbouring Kogan Creek coal-fired power station, are both using Australian technology.

Solar dish technology developed by the ANU is being used in the Solar Oasis project in Whyalla, and the CSIRO also has numerous pilot projects using different forms and applications of CSP technology.

A report prepared by IT Power on behalf of the Australian Solar Institute suggests solar thermal could account for nearly half of Australia's electricity needs by 2050, and even if up to 15GW of capacity could be deployed in the coming two decades, it would account for nearly one third of capacity and up to one fifth of actual generation.

However, the report notes the technology needs support and deployment to help reduce costs, just as the wind energy and solar PV technologies have enjoyed.

Lead author Keith Lovegrove says solar thermal technologies sit around levelised cost of energy of about $250/MWh, but are likely to fall to half of that in the next six to 18 years, depending on the rate of deployment.

That accords to scenarios painted by the IEA in a landmark report on solar energy late last year, which noted that by 2020 or soon after, most technologies, including coal and gas, will be hovering around the $100/MWh mark.

Lovegrove says the key attraction of solar thermal, apart from its obvious emissions abatement opportunities, is that its ability to provide dispatchable energy means its energy will be valued more, and could easily deliver into periods of high demand just as gas-fired generators do now.

He sees one of the key markets for CSP being in stand-alone clusters with storage that can cover the cost of grid extension.

However, the report notes that solar thermal is an opportunity that can be missed.

Much of the recent development has occurred in Spain and the US, and South Africa and India have both identified the development of solar thermal technologies as "strategic initiatives" for their country. Indeed, India recently signed a contract with Areva, the proposed developer of the Solar Dawn facility, using the same Australian technology to build a similar sized plant.

South Africa recently concluded a series of auctions that set the price of tariffs to build three medium-sized plants, 50MW to 100MW, over the next two years.

Smart thinking

HERE'S a new concept in reducing energy consumption: intelligent efficiency. Essentially it refers to a movement beyond energy-efficient light bulbs and other savings devices to a systems-based approach that combines the benefits of a suite of new technologies such as smart meters, renewables such as solar PV and electric vehicles.

Energy experts are excited about it because they expect it could replace nearly a quarter of current energy consumption, and cite it as a further example of how a combination of new technologies linked through smart devices and communications threaten to cause a revolution in the global energy industry and will force utilities to address a growing reality that, despite all their previous forecasts, demand for their product is falling.

This has special relevance in Australia where customers are witnessing a marked fall in the cost of technologies such as solar PV, as well as being subjected to rising electricity prices, a situation exacerbated by the utilities' push for time-of-use pricing.

That, in turn, is pushing savvy consumers to consider alternatives combining solar PV with battery storage, or other technologies that can reduce peak consumption.

Eventually, it will incorporate electric vehicles. Smart homes will follow in the footsteps of six-star, smart buildings.

Intelligent efficiency could have a dramatic impact on the demand outlook for Australian utilities, and the sort of new generation needed in coming decades, plus whether or not the tens of billions of dollars being spent on transmission and distribution networks is money well spent.

The American Council for an Energy-Efficient Economy released a report this week that describes "intelligent efficiency" as a series of complex systems (such as entire cities, transportation systems and other networks) rather than individual devices such as EVs or energy efficient fridges.

It says these system efficiency opportunities produce energy savings that dwarf component-based efficiency improvements by an order of magnitude.

The key is the incorporation of information and communication technologies, such as the internet, affordable sensors, and computing capacity offering system-wide energy savings that dwarf component-based efficiency improvements.

"If homeowners and businesses were to take advantage of currently available information and communications technologies that enable system efficiencies, the United States could reduce its energy use by about 12 to 22 per cent and realise tens or hundreds of billions of dollars in energy savings and productivity gains," the report says.

Sustainable super

FOLLOWING our report a few weeks ago on the global push for climate bonds as a means of financing low carbon investments, and Hesta's decision to allocate $100m to a low carbon portfolio, the $6bn Local Government Super has announced what it claims is an Australian first, moving nearly all its $170m government bond allocation to a newly created Sustainable Global Government Bond Fund, with an emphasis on climate.

The mandate will be managed by Melbourne-based specialist investment manager Omega Global Investors, which says it is creating an Australian first -- and one of the few in the world -- that identifies which governments are resilient to environmental, social and governance themes, including financial market instability, climate change, resource scarcity and the impact of ageing populations. There is a specific allocation of up to 15 per cent for "green" or climate-themed bonds.

Head of sustainability Bill Hartnett says LGS believes climate bonds and green bonds are an excellent innovation, providing access to investments such as wind farms in China, the first large scale private solar farm in Thailand, and sustainable transport systems in Colombia. All are AAA-rated investments.