CLIMATE SPECTATOR: Flagships frenzy

After three years, the Solar Flagships program is in a precarious position. As the Australian Renewable Energy Agency takes over the project, there are fears it may be scaled back.

The big news has revolved around Solar Flagships where a missed deadline for Solar Dawn was very quickly followed by a Queensland government backtrack and a federal government palm off of the project to the Australian Renewable Energy Agency (ARENA). The consortium behind Solar Dawn has publicly remained confident the project will proceed, but now it’s in ARENA’s hands, it wouldn’t surprise if it were to be downsized.

As it stands, the Solar Flagships program is looking a little shaky. It has 159 MW and $170 million in investment to show for almost three years of work and both of those won’t actually be realised until 2015. Despite this, there is still great hope that previously shortlisted candidates for Solar Flagships will get funding through the new manager of the scheme, ARENA. Here’s where we stand:

TRUenergy/First Solar: Its funding case is greatly enhanced by the names of the partners: TRUenergy, being one of the country’s largest energy retailers means a PPA is not a problem, and First Solar, with its size and scale helping keep costs in check. First Solar has already been a beneficiary of Solar Flagships through its partnership with AGL. The Mallee Solar Park proposed by the two companies has also previously had a Baillieu government endorsement, which should help its prospects going forward.

Moree Solar Farm (Pacific Hydro/FRV): Won the original tender so have always been frontrunners for government funding. The consortium believes it has solved its lack of a PPA, with Pac Hydro becoming an energy retailer, and has reduced costs significantly thanks to the rapid price declines seen as a result of a supply glut. Pac Hydro’s general manager Lane Crockett said last week that the government still viewed the project as "very attractive… for funding”.

Infigen/Suntech: It is a diversified project, which clearly the government likes based on comments from Pac Hydro suggesting a key reason it lost out to AGL was the latter’s diversification in its project (it has two sites instead of one). "Infigen in continuing to investigate the development of its solar PV opportunities, including seeking ARENA funding,” the company told Climate Spectator.

Solar Dawn: Still viewed as the frontrunner when it comes to large-scale solar thermal despite struggles to reach financial close. The federal government has shown a bit of patience in terms of granting a financial deadline extension – the length of which was not afforded to Moree, as the government had more options in large-scale PV. One of the most crucial issues is getting the Queensland government on-side. With the Newman government showing a desire to back away from the project ever since it gained office, this may be quite a challenge. Nonetheless, it seems like a prime project for ARENA funding.

Wave power

The wave sector has made headlines this week, with the federal government announcing two new projects in the country’s south will share in $10 million from the Emerging Renewables Program. The first winner is BioPower Systems Limited’s bioWAVE Ocean Pilot off the coast of Victoria, which will receive $5.6 million toward the $15 million project. The other winner was Oceanlinx Limited, which is set to pocket $4 million toward its $7.2 million Commercial Wave Energy Demonstrator off the coast of South Australia.

"Including a grant for Carnegie Wave Energy, the Australian government has now contributed close to $20 million to new wave energy technologies through the $126 million Emerging Renewables Program,” Energy Minister Martin Ferguson said.

Bluescope Steel, solar

The wave power grants were not the only developments for the Emerging Renewables Program this week, with Ferguson also awarding a grant of around $2.3 million to BlueScope Steel under the $126 million program.

The funding will help BlueScope develop a prototype building-integrated photovoltaic system, or BIPV, and will comprise almost half of the project cost of just over $5 million.

"It will help to make Australia a leader in this type of technology (BIPV),” Ferguson said.

Vestas

Rumours abound about the world’s largest wind turbine maker as declining turbine prices and excess capacity put a dent in its bottom line. Reports of debt restructuring talks with key lenders have dominated the news this week and put pressure on the firm’s shares, although they have recovered partially in the past two trading days. Speculation has also centred on the prospect of the firm putting itself up for sale. For now, the company has yet to comment on the rumours. Meanwhile, its share price remains near an all-time low and sits just above half its price at the start of the year.

Hot Rocks

Investors in geothermal group Hot Rocks Limited witnessed a major collapse in the company’s share price on Thursday after its joint venture partner in the Chilean Longavi project, Energy Development Corporation (EDC) backed out. A legal spat is brewing over the matter, with Hot Rocks demanding the EDC pay the $1 million fee as agreed in May, something EDC is not prepared to do at this stage. The companies also have a JV partnership in two Peruvian geothermal projects and while EDC has not notified Hot Rocks of an intention to withdraw from those developments, they must surely be in some doubt.

The company’s shares closed 30 per cent lower on the news.

Goldwind, Gullen Range Wind Farm

Goldwind has signed a grid connection agreement with TransGrid for the company’s Gullen Range wind farm near Goulburn in NSW. The project is Chinese-based Goldwind’s second in Australia after its Mortons Lane wind farm in western Victoria, which is sold last week to another Chinese firm. It is the first to use Goldwind’s 2.5 MW wind turbines however.

"The project now has both a Grid Connection Agreement and a Power Purchase Agreement (PPA). We are looking forward to energising the windfarm in late 2013,” John Titchen, Managing Director of Goldwind Australia, said.

Construction on the 182.5 MW project is expected to begin in October.

Investec Bank Australia, Hornsdale Wind Farm

A 105-turbine wind farm near Jamestown in South Australia has received state government approval, according to the ABC. The $900 million Investec Bank Australia project will have a total generating capacity of 315 MW. Chairman of the Northern Areas Council Ben Browne said that despite some opposition, most nearby residents were likely to be in support.

"I think the majority of people in that region, certainly the people that are participating, will welcome it, will welcome the investment and income created from it,” he told the ABC.

Quick takes:

-- Pacific Hydro last week lodged a development application for its Keyneton wind farm, a 100 MW, 42-turbine project in South Australia. The company has been in the news quite a lot recently, with plans of a major expansion in Brazil garnering headlines. Pac Hydro is also looking to get its Moree Solar Farm back on track after last month’s setback.

-- ASX-listed Infigen Energy has signed maintenance agreements with Mitsubishi Power Systems across five wind farms in the US. The deal covers 564 1MW Mitsubishi turbines, 39 per cent of Infigen’s US capacity on an equity basis, until March 2017.

-- Earth Heat Resources is set to raise up to $30 million to help fund the development of the Copahue geothermal project in Argentina and a takeover of Geothermal One, its JV partner in Copahue.

-- Panax Geothermal has reported an increase in the planned capacity of its Ngebel geothermal project in Indonesia from 165 MW to 220 MW on the request of the Indonesian government. It has 35 per cent of the project. Yesterday, Panax reported a trading halt in its shares pending an announcement regarding a potential capital raising.

-- Troubles at the Yallourn power plant and associated coal mine, read: flood and earthquake disruptions, continue to create conjecture in the media about the impact on the possible float of TRUenergy.

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