Surely it wasn’t deliberate! But if the Labor government had wanted to further distinguish its clean energy policy from its predecessor’s, then it would have got a fair bit of traction from the choices made in the first round of the $1.5 billion Solar Flagships program.
The two consortia chosen to lead Australia into the era of large-scale solar energy facilities both contain technologies or business plans that had been forced to emigrate under the Coalition government because of a lack of support and incentive.
Dr David Mills developed his unique solar thermal technology at the UNSW, but was forced to pack up and go to California to seek investment backing and government incentive. Ausra, the company he founded, was bought by the French government-owned nuclear energy giant, Areva, for about $200 million early last year. Now Areva has been chosen to “bring the technology home” and build a $1.2 billion, 250MW solar thermal hybrid plant near CS Energy’s Kogan Creek power station in Chinchilla in south-west Queensland.
BP Solar closed Australia’s only solar PV manufacturing facilities in 2008, although that had more to do with internal decision-making than local policy. But its consortium partner, Australia’s Pacific Hydro, pushed all its renewable energy development overseas in the mid-2000s after Howard refused to extend the renewable energy target. Now the consortium, along with Spanish solar giant FRV, attracted to these shores for the first time by the Flagships process, has been chosen to build a $923 million, 150MW solar PV plant in Moree in NSW.
And as if to underline the difference, as Prime Minister Julia Gillard and Energy Minister Martin Ferguson sung the praises of the solar industry at the launch of the solar thermal research centre at the CSIRO facilities near Newcastle, and then at the flagship announcements in Brisbane and Sydney respectively, Opposition Leader Tony Abbott chose to turn up at a coal mine in the Hunter Valley to complain about a carbon price. It could hardly have been scripted any better. If only the mainstream media had noticed.
But let’s not get too carried away just yet. In so many ways, the Solar Flagships program typifies how political vanity can diminish a really good idea.
We’ve seen it with the spectacular indulgence of the NSW Labor government in the feed-in tariff for rooftop solar, when it sought to curry favour by paying a rate far in excess of what was needed. And we’ve seen it the grandiose plans by former PM Kevin Rudd — the originator of the Solar Flagships concept — to create a series of solar mega projects, when what was really needed was a multitude of smaller projects to test the huge variations in Australia on technologies, costs, locations, and grid connections.
There is evidence that the federal government has finally got this message, at least over the flagships concept. “We’ll see if we can learn anything from this process,” Ferguson said on Saturday. “We’ll be even better at it next time.”
The expectation is that the second round of the flagships program is likely to see up to a dozen or more smaller projects of around 50MW to test the various technologies and conditions in the country. Ferguson said falling costs would mean that the government would get a “bigger bang for its buck” next time around.
Pushing forward with the next phase will be critical to retaining the interest of the 50-odd other applicants for the Solar Flagships funding. If, as Ferguson rightly suggests, the costs of solar energy are falling “faster than anyone expected”, then Australia needs to encourage these companies to invest here before their balance sheets are occupied elsewhere. The withdrawal of Spain’s Acciona from the Flagships shortlist was a warning that some large international clean energy developers will not leave capital tied up unnecessarily when there are opportunities to be pursued in other countries.
The Greens, of course, and those backing emerging technologies, want added assistance, such as feed-in tariffs and loan guarantees, and will put these ideas forward at a solar round-table on July 8. Ferguson has resisted this, although it was interesting how he noted that the costs of solar PV were plunging because of economies of scale. And what is driving these economies of scale, here and overseas? The very feed-in tariffs and loan guarantees that the minister abhors.
The other major task for Canberra is to try and ensure that the next generation of Australian technology does not end up, like Ausra, in the hands of a French government, or any international. Ferguson argues that the “real economic opportunities will come through R&D. And we can export those opportunities”.
He went on, sounding like a genuine clean-energy enthusiast, describing the huge demand for renewable energy technologies. “The real opportunities will come through R&D, and then we’ve got to keep control of the technology and sell it throughout the world,” he said. But many people will argue that is not done simply with R&D; that it is done with commercial programs, the “learning by doing”, that is the catch-cry of the clean energy transformation. Ausra was sold to the French because it had no resources to make that transition.
Still, faced with the task of picking two winners from seven applicants, the selection team appears to have done a good job. Interestingly, they eschewed the solar PV proposals put forward by the vertically integrated utilities AGL and TRUenergy. Both had teamed with Bovis Lend Lease and proposed to use the thin-film technology of US market leader First Solar. Perhaps the selection team was conservative, but the winning bid brings more players to the market. The other applicant to miss out was the Infigen/Suntech proposal.
The solar thermal choice was more predictable. Transfield — which was also proposing a linear Fresnel technology owned by its German offshoot Novatec Biosol — was once considered the likely leader on cost, but fell behind the pack when its proposal to transform the Collinsville coal-fired power station near Townsville proved more complex than first assumed. The other proposal was the Solar Flair alliance, using parabolic trough technology and comprising a heavyweight alliance including Parsons Brinckerhoff, Siemens, John Holland and CS Energy. It, presumably, will be bidding in the second round.