Areva-led Consortium Pulls Plug on 250-MW Australian CSP Project

Oliver Wagg, Correspondent
November 12, 2012 | 5 Comments

A consortium led by French nuclear group Areva has ditched a A$1.2 billion ($1.2 billion) concentrated solar thermal project after the federal government pulled critical funding.

The Solar Dawn consortium, which includes developer Wind Prospect, has been plagued with problems since winning $464 million in federal funding through the Solar Flagship program to develop a 250-MW solar thermal plant in Queensland’s outback. Without a supply agreement in place, it failed to meet a 30 June financing deadline, prompting Queensland’s government to withdraw A$75 million in state funding. In July, federal energy minister Martin Ferguson referred it to the newly formed Australian Renewable Energy Agency (Arena) for consideration.

Although Solar Dawn remains committed to Australia's large-scale concentrated solar power industry, it will no longer be pursuing development of the proposed 250-MW solar thermal power facility in Chinchilla, southwest Queensland. "With Arena soon to embark on a range of new initiatives, we look forward to sharing our experience and working with Arena to help build Australia's clean energy future," said Solar Dawn consortium spokesperson Anthony Wiseman.

Arena — established last year to spur investment in renewable energy technology — also said it will not fund a solar power project in Victoria proposed by EnergyAustralia, owned by Hong Kong-listed CLP Holdings, because it was considered too similar to an AGL-First Solar project. U.S. thin film supplier First Solar and local utility AGL won A$129.7 million in government funds to build a 159-MW project across two sites in New South Wales (NSW) last June.

The agency continues to talk with local developer Pacific Hydro and Spain’s Fotowatio Renewable Ventures (FRV) about its proposed solar farm in NSW and is still in discussions with Australian developer Infigen Energy and China’s Suntech on another proposal for NSW.

Arena chair Greg Bourne says the agency’s new investment plan for 2012-2015 will target four new programs aimed to deliver renewable systems in regional and remote locations, remove roadblocks for regional and remote renewable energy, build Australia’s next generation solar and develop a comprehensive knowledge sharing program.

“The Regional Australia’s Renewables program will aim to deliver renewable systems in regional locations where energy consumption is forecast to increase and where fossil fuel-based generation costs are the greatest,” Bourne said. The Emerging Renewables program and the Southern Cross Renewable Energy Fund remain open for business.

Arena’s current portfolio includes a range of renewable energy projects, soon to be supplemented by solar research and development projects from the Australian Solar Institute, Bourne says.

Despite today’s setback for Solar Dawn, solar thermal proponents say the government’s Energy White Paper calls for 16 percent of total electricity demand to be sourced from solar thermal by 2050, which would make Australia a global leader.

The Port Augusta, South Australia project, currently under consideration by local independent energy retailer Alinta, may be Australia's only short-term prospect for solar thermal development.

Alinta told Renewable Energy World it was keen to build a pilot solar thermal plant in Port Augusta alongside the existing coal-fired power stations and has undertaken a “high level pre-feasibility study," and "progressing discussions with government and various agencies seeking funding support for a commercial feasibility study.”

Lead image: Pulled plug via Shutterstock

5 Comments

Arno A. Evers
November 14, 2012

Please forget ALL of the governments´If we want to achieve a real green and sustainable world, we have to create it ourselves!

Hiro Chandwani
November 14, 2012

I agree one hundred percent with 'SJR Brant's' views. The required encouragement should come from the respective governments and the corporates. An investment of a small fraction of the project cost in development work for the critical components is not going to hurt anyone but will go a long way in overall reduction of costs. it will promote healthy competition and, one day, we can bring down the cost of generating electricity on par, if not below, that from conventional energy sources.
In India, this trend has started by a small begining by the government providing incentives for local development of the technology. However, this is not enough as only educational institutions are given the grants on merit. However, the educational institutions lack practical manufacturing experience and again depend on the components manufacturers. They should encourage individual private industries for component development as well.

Steven Brant
November 13, 2012

I believe that CSP is the answer to utility scale solar power and I can appreciate Australia's desire to support it. I also believe that the costs have been hyper inflated by the large players, who tend to over-engineer these plants and try to make money on the build costs in addition to making money on the operations. Since there are few companies actively engaged in the CSP industry and countries who are willing to attract them with high tariffs or feed-in-tariffs, there is no incentive for them to lower costs. I agree that more effort needs to be focused on encouraging component manufacturers to enter the market but I also believe new players should equally be encouraged to participate. This should lead to competition and a lower cost CSP industry. Big companies are not always interested in lowering costs and welcoming competition. Siemens is getting out of the CSP business because they feel CSP is going the way of the dinosaur. I am more inclined to believe that Siemens is simply not prepared to invest more into an industry where they will be earning less. I think time will show that they made the wrong decision.

Hiro Chandwani
November 13, 2012

What are the main reasons for Areva pulling out of the consortium?
One, it is high costs of the technology and two, lack of faith by financiers / investors in the technology again due to high costs.
This is relatively new technology and there are very few big names like Areva, Siemens etc. so called established technology suppliers who are dictating the prices of the critical components.
The costs could be brought down by 35 - 40%, if we encourage new components developers. All we have to do is invest less than 1% of project cost in the development venture to bring down the costs and compete with other renewable energy sources. This is very much possible and needs courage to take small risk of investing in R & D work. This has started happening in India and could be repeated in Australia.

Arno A. Evers
November 13, 2012

CSP does not make any sense,
regardless which subsidizes is put into it.
What we all need, globally, is a really decentralized
energy infrastructure, based on 100% renewable energies
and owned and operated by the users...
As this example shows:
http://www.hydrogenambassadors.com/background/use-of-a-personal-power-provider-3P+.php

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Oliver Wagg

Independent journalist with a background in sustainable business and ethical finance, the renewable and low-emission energy sectors, climate-change science and policy and the not-for-profit sector.