Though the Australian government has almost abandoned its renewable energy target with its New Energy Plan which remains ambiguous towards renewable energy, large companies are planning to build huge multi-megawatt solar farms.
A number of companies have announced plans to build large plants.
Indian EPC player Sterling and Wilson plans to build out 500 MW of solar capacity Down Under with an investment of $459 million. This large EPC player sees an attractive market opportunity due to the falling price of solar plants which makes it competitive in the Australian market. Irish company DP Energy is another company which has announced to build 300 MW of solar (NYSEARCA:TAN) capacity in its Port Augusta hybrid renewable energy park. The company has already contracted two major renewable energy companies Vestas and Downer for developing the wind and solar capacities in the park along with a significant amount of storage capacity.
Also, read Sonnen’s “Flat Price Electricity” Further Disrupts Electricity Market In Australia
DP Energy is building the hybrid park in such a manner that its power output curve will remain quite flat with wind energy peaking in the morning and evening, and solar peaking in the afternoon. The storage will further flatten the curve making the power output similar to that of a coal plant. While Australian government is still debating on how to solve its power strategy amidst high retail prices, many developers have already placed their bets on a renewable energy(NYSEARCA:XLE) future. Solar and wind costs have declined drastically in recent times falling even below that of coal(NYSEARCA:KOL) and gas. Even storage costs have fallen sharply and now a mix of these three technologies can act the same as an equivalent centralized fossil fuel plant with almost the same cost and none of the harmful pollution and carbon emissions.
Last week a major steel company had announced plans to build 1000 MW of solar energy to feed its power-hungry steel plants. The Liberty Group had also announced to build aluminum plants which would also be powered by solar energy. One thing is very clear to me despite the Australian government’s drama, solar energy will become the dominant source of energy in the country given the favorable economics. It is only a matter of time!