The next 18 months will see a surge of PV power plant activity in Australia. The market segment, which has long trailed the country's strong rooftop market, will grow from 240 MW in installed capacity today to at least 720 MW by the end of 2017, driven primarily by an ARENA grant program.
The ARENA large scale solar program has sought to stimulate the large scale PV segment in Australia, which has been slow to gain traction, as utilities hold back of developing solar farms in the country, nor sign PPAs with developers. This reticence to facilitate PV power plant development has been widely reported as amounting to an investment freeze, designed to protect existing fossil-fuel power generation assets.
The stagnation of the utility scale segment in Australia will change dramatically if the projects successful under the ARENA are built out as planned. Successful projects must be completed by the end of 2017, under the program.
Six plants in Queensland, five plants in New South Wales and one plant in Western Australia are slated for funding, in a major milestone," said ARENA CEO Ivor Frischnecht, in a statement.
The 420 MW of projects will together contribute around one tenth of Australia's 2020 Renewable Energy Target. 766 MW of projects made the initial shortlist.
The program was designed with an additional goal of seeing the soft costs of developing large scale solar come down in Australia. ARENA had hoped that big PV's LCOE could be brought close to that of wind power in Australia under the program, and some industry participants are indicating that is occurring very rapidly.
When we announced the round in September last year we expected AU$100 million ($77 million) of grant funding would enable around 200 MW of new projects," said Frischnecht. "Weve achieved more than double that through this round with $92 million ($71 million) funding supporting around 480 MW in total."
The result also far exceeds pv magazine‘s prediction, published last year, that around 250 MW of projects will be developed under the ARENA program. It even trumps the tip by local market analysts Green Energy Markets that contracts for around 450 MW of utility scale PV will be signed in 2016.
Australias big solar revolution is tantalizingly close and, as more home-grown businesses step up to provide construction, engineering, and financial services, this newest tranche of ARENA-supported projects is well positioned to take the sector even closer to commerciality, added ARENA CEO Frischnecht.
Today's announcement has come at the same time as a group of around 25 renewable market participants has partitioned Australian federal members of parliament to maintain ARENA itself. The Federal Government has added the defunding of ARENA to an omnibus government budget bill currently before Parliament.
The successful project can also apply for debt financing from the Clean Energy Finance Corporation. ARENA reported that a number of developers have indicated that they intended to do so.
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