Australia awards funding for solar plants, set to triple capacity

[MELBOURNE] The Australian government will help fund a dozen large-scale solar projects worth A$1 billion (S$1.03 billion), as it looks to boost the use of clean power in a coal-rich country, which is one of the world's biggest carbon emitters per head.

The Australian Renewable Energy Agency (Arena) said on Thursday the projects would triple Australia's large-scale solar capacity to 720 megawatts, and deliver a tenth of the new capacity needed to meet its 2020 renewable energy target.

The government will provide A$92 million for 12 projects, which includes three proposals from private French firm Neoen SA, and one each from Thailand's Ratchaburi Electricity Generating Holding and Infigen Energy.

Australia wants to double its large-scale renewable energy generation to 33,000 gigawatt hours by 2020, which means by then solar, wind and hydroelectricity would have to make up nearly a quarter of the country's power generation.

The government's tenders to back solar projects have helped build momentum in the industry and forced companies to become more competitive, which will help push the sector closer to being commercially viable, Arena CEO Ivor Frischknecht said.

"We aren't quite there yet, but the commercial viability of large-scale solar in Australia is tantalisingly close and the question is now 'how soon' rather than 'if' or 'how long'," he said in a speech, announcing the winning bids.

As evidence of the improving competitiveness, Arena said early large-scale solar plants needed A$1.60 per watt in government funding, but funding for the 12 new projects has dropped to just 19 Australian cents per watt in just three years.

The biggest plant to be offered funding was a 105 MW project, set to be Australia's largest solar farm, which Origin Energy Ltd plans to start building near its gas-fired Darling Downs power station in the state of Queensland in 2017.

"Origin's substantial gas-fired generation portfolio will help to balance out the intermittent nature of renewable generation," Origin's Energy Markets chief executive Frank Calabria said in a statement.

Australia has the highest uptake of rooftop solar photovoltaics (solar PV) but lags behind other countries in the construction of large-scale solar farms, with 240 megawatts of capacity built so far, due to higher costs.

The country is on track to cut carbon emissions by 13 per cent by 2020 from 2005 levels, however, the industry and green groups say it will have to step up the pace of solar and wind power growth to meet the government's renewable energy target.

Arena, which faces a A$1.3 billion funding cut under the conservative government's latest budget plan, is helping fund trials of battery storage, which will be key to making solar and wind power more reliable.

REUTERS