Australia has been seeing high power prices for a long time due to the oligopoly nature of the power sector.
However, the advent of cheap solar energy has started to upend the power market as entrepreneurs set up large solar power plants to compete with the high priced gas and thermal power plants.
While Australia has already become a solar (NYSEARCA:TAN) success with almost 20% of households using solar power, large-scale solar plants had been slow to come up. But now a number of developers and utilities are setting up these plants along with storage facilities to directly go head to head with the fossil fuel generators. These companies think that their price can compete better with the existing setup.
Read more about the Solar industry in Australia.
Germany Innogy which is a subsidiary of the utility giant RWE is setting up two large solar plants of 347 MW and 115 MW in New South Wales which will get commissioned in 2020. These two plants do not have PPAs in place and RWE is confident in building these plants at a low enough price that they will be able to sell power in the wholesale market. Solar power plants have become so cheap that they are able to effectively work as merchant power plants.
Also, read South Australia could be 100% Renewable Energy Powered by 2025
New South Wales has sanctioned 10 solar power plants with a combined capacity of 1.2 GW. With these plants getting finished, the province will see a substantial amount of its power needs being met by renewable energy.