Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Renewable energy agencies announce $350 million investment in large-scale solar -

View in ParlViewView other Segments

DAVID MARK: Two of the nation's renewable energy agencies are planning a massive investment in solar power which could see the construction of up to 10 new large-scale power plants.

The Australian Renewable Energy Agency (ARENA), and the Clean Energy Finance Corporation (CEFC) have announced a combined $350 million investment.

Despite Australia's sunny climate, we're behind many comparable nations when it comes to the number and operation of large-scale solar power plans.

Both organisation say the new investment will drive down the cost of solar development, and create more innovation in the sector.

Will Ockenden reports.

WILL OCKENDEN: Whichever way you look at it, Australia is a sunny country.

Experts say that, in theory, if you took a 50 kilometre by 50 kilometre area in the country, enough sunlight energy would fall on it to provide all of Australia's electricity.

But the nation lags behind other countries when it comes to large-scale solar plants.

To try and change it and drag down costs, the Australian Renewable Energy Agency has announced $100 million grants to double the generation capability.

ARENA's chief executive is Ivor Frischknecht.

IVOR FRISCHKNECHT: So we're talking anywhere from five megawatts and upwards and what that means in physical terms is several hectares typically. But solar can be large even at a relatively small scale, so when put in context of say a wind farm or a coal fired power station, you can actually have commercially competitive solar that's relatively small.

Our funding will provide $100 million for the building of these large scale solar farms.

To put it in another context, a large coal fired power station would be typically 1000 megawatts, something like that.

WILL OCKENDEN: So it's $100 million, what is the ultimate aim for this large investment in large scale solar?

IVOR FRISCHKNECHT: The goal is to reduce the cost of the supply chain in particular, so cables and brackets and frames and posts and construction costs, and financing costs - all of those costs are local costs, only a small fraction, relatively small fraction, is the cost of the panels that are imported. And all of those local costs are very high still, because we have very few solar farms here, we only have four.

WILL OCKENDEN: So by the investment, it's to aim to bring down not the panel price, but the actual infrastructure behind it?

IVOR FRISCHKNECHT: That's right, which is in fact the majority of the cost, and once we do that, we anticipate by the early 2020's large scale solar will be competitive with wind power.

WILL OCKENDEN: When will it be competitive with the fossil fuels, like coal for example?

IVOR FRISCHKNECHT: The challenge is that we have existing fossil fuel power plants that are fully depreciated - that means they've been fully paid for, and you can't compete against that and it will be very, it will be awhile before we can.

However, if you wanted to build a brand new coal fired power station, it already is competitive, so both wind and solar, similar in price or cheaper.

WILL OCKENDEN: He says he hope the projects will be built by the end of 2017, and will hopefully double the existing capacity of large scale solar in Australia to around 400 megawatts.

To put large-scale solar into context, there's already 4,000 megawatts of household solar already installed in homes and businesses around the country.

But Ivor Frischknecht says large-scale solar is still essential.

IVOR FRISCHKNECHT: It is a different way of producing energy and it's highly complementary with household solar, large-scale is much more controllable, much more reliable, can be more easily forecast and so it can be more easily integrated into our energy system.

WILL OCKENDEN: Another $250 million in funding will come in the form of loans via the Clean Energy Finance Corporation.

The way the ARENA grant and CEFC loan system works is that a group would apply and then be awarded a grant, raise some of its own private capital, and then receive a loan from the CEFC for the rest.

WILL OCKENDEN: The Clean Energy Finance Corporation's chief investment officer is Ted Dow.

TED DOW: The long-term benefit will be that we'll drive down the costs of these technologies much much faster than we would in the absence of any program. What consumers are facing long term is a complete overhaul of the power generation infrastructure in Australia.

We've got about a third of our power stations today, coal fired generation power stations, which produce something like 85 per cent of our power. About a third of them today are well past their useful service lives; in about another five to 10 years, two thirds will be well past their useful service lives, so there's a complete overhaul coming of Australia's power generation back bone.

And the cheapest way to replace that today will be to drive down the costs of solar, wind and other renewable technologies.

DAVID MARK: Clean Energy Finance Corporation's Ted Dow, ending Will Ockenden's report.