ARENA rejects funding for Alinta's project for CSP plant in Port ...

ARENA rejects funding for Alinta’s project for CSP plant in Australia

Alinta drops Port Augusta concentrated solar power project after ARENA rejects funding.

Efforts to build Australia’s first large scale concentrated solar thermal project at Port Augusta have been frustrated.

Efforts to build Australia’s first large scale concentrated solar thermal project at Port Augusta have been frustrated after Alinta Energy said it was dropping the plan because it failed to get funding support for a feasibility study.

Alinta Energy, which had been contemplating adding concentrated solar thermal technology to its ageing coal fired power stations in Port August, or using the technology to replace them entirely, announced on Tuesday that its application for funding into a feasibility study had been rejected by the Australian Renewable Energy Agency.

Alinta Energy said it was disappointed by the decision. As RenewEconomy reported in April, Alinta had hoped to spend 12-15 months reviewing technologies that would suit Port Augusta, and possibly hybrid solutions that could be added to the Northern Power Station.

“Given the identified potential for solar energy development at site, Alinta Energy is disappointed by this outcome but acknowledges the significant challenges to full-scale commercialisation,” the company said in a statement on Tuesday.

It said it remain committed to the Northern power station and its Leigh Creek coal mine, despite the fact that the plant has been withdrawn from service in summer months because of reduced demand and low electricity prices, and the growing penetration of wind and household solar. It considered the idea of big solar at Port Augusta to be off the agenda for the moment.

It is the second rejection of large scale solar projects in the “steel triangle” of South Australia in recent months, following its decision to pull previously allocated funds to the Solar Oasis project that was to feature the “big dish” technology of Wizard Power. That company is now in voluntary administration and the technology is up for sale.

ARENA cited delays and the inability to meet deadlines as the reason for ending the support for Solar Oasis.

A spokesperson for ARENA said the agency would not comment on individual applications, but insisted that the “door remained open” for Alinta. “Our programs are open to applications for funding with each project considered on its merits as part of our commitment to making renewable energy technologies more affordable and increasing their supply in Australia,” she said.

Australia has had repeated failures in is attempts to build large scale solar thermal – most notably the Solar Flagships project – despite developing its own technologies and having excellent solar resources. Industry people say this is partly because of Australia’s relatively low wholesale electricity prices, and the current overcapacity in fossil fuel generation. However, large scale concentrated solar thermal projects are being built in the US, as we reported here and here, and in South Africa, and will soon be rolled out in Saudi Arabia on a large scale.

Project developers believe Australia remains an attractive market. However, it seems certain that the first projects will likely be built in off-grid, end of grid, or in hybrid situations. The off-grid and end of grid locations, which will include miners currently sourcing expensive fossil fuels or gas-fired generation, is a focus of ARENA’s funding.

The ARENA spokesperson noted that the agency has provided $2.5 million to fund a hybrid project that proposes to use a combination of solar thermal, solar PV and gas to replace the Collinsville coal fired plant in northern Queensland.

Andrew Want, the head of the Australian Solar Thermal Energy Association, described the decison as “baffling” and said it could send confused messages to international investors and project developers. “Foreign investors are keeping a very close eye to what is happening in Australia,” he said.

Want said the Port Augusta project could meet many of ARENA’s criteria for remote, end of grid or even hybrid plants. He said it was an excellent opportunity to display concentrated solar with storage, which many believe is the next critical element of the technology’s development. “There must be other reasons (for the decision),” he said.

(RenewEconomy wonders if ARENA simply thought that the terms sought by Alinta were not acceptable, but obviously neither Alinta nor ARENA would comment on that).

The Repower Port Augusta Alliance, which expressed community groups and NGOs, expressed its disappointment, saying there had been strong community backing, with 4,000 Port Augusta locals voting their support for the concept.

“It is critical for the future of jobs and clean air in Port Augusta that the Federal Government back solar thermal in Port Augusta with funding” spokesman Daniel Spencer said, “Port Augusta could become a leader in renewable energy, but it won’t happen without government support”.

Alinta said it will continue to investigate other opportunities to progress renewable energy investment “consistent with our national portfolio.” In the past, it has indicated it was looking at solar opportunities in the Pilbara.

It said it would “revisit potential opportunities at Port Augusta as technologies continue to mature and the policy environment becomes more certain.”