Labor’s Solar Flagships mirage

Solar Dawn has now been referred to ARENA for funding assessment after failing to reach financial close by June 30. So where does that leave the much-hyped Solar Flagships program?

The future of the Solar Dawn project near Chinchilla in Queensland is now in the hands of the Australian Renewable Energy Agency after the Queensland government took advantage of a missed milestone to back out of its funding commitment.

The planned 250 megawatt solar thermal facility was one of two winners in the first round of Solar Flagships funding. The consortium behind Solar Dawn was given an extension until June 30 to achieve financial close after failing to do so by the original deadline. Today, Solar Dawn informed the federal government that it was unable to achieve financial close in time, with Queensland Premier Campbell Newman using the opportunity to back away from the pledged $75 million in state support.

Project Director Anthony Wiseman said the news was a setback but Solar Dawn will pursue funding from ARENA and hopefully negotiate a fresh deal with the Queensland government.

“Solar Dawn is offering something incredibly promising – benefits previously not available within the Australian renewable energy industry. There are various options to move Solar Dawn forward, and we are committed to making the project successful,” Mr Wiseman said.

So where does that leave Solar Flagships?

The $1.5 billion program will now effectively be under the control of ARENA, the newly formed body that officially came into being yesterday. ARENA is in charge of $3.2 billion worth of funding, inclusive of the $1.5 billion from Solar Flagships. As it stands, ARENA is charged with quite a task, attempting to turn the whole Solar Flagships program around from what is fast looking like an inexpensive, yet spectacular letdown.

In 2009, Solar Flagships was created amid much fanfare and celebration. In early 2011, its budget was stripped before the Greens used their position of influence when it came to a vote on Labor’s proposed flood levy to get a funding recommitment from the government.

Then progress was seen with the release of the shortlist for round one funding and, in the middle of last year, the announcement of the first round tender winners – Solar Dawn and the Moree Solar Farm. These two projects were set to receive $770.5 million of the $1.5 billion committed to the Flagships program. In February, it was confirmed that both Moree and Solar Dawn failed to meet funding deadlines, with Solar Dawn given the extended deadline and Moree required to go through the tender process once more.

On June 9, energy minister Martin Ferguson said that an AGL/First Solar proposal had claimed the rights to federal money ahead of Moree and two other contenders, with $130 million to be committed toward the $450 million project across two sites in New South Wales. Added to this is around $40 million to the University of Queensland and University of New South Wales to conduct research at the sites.

In essence, the original two winners of funding in the order of $770 million have become one winner with funding of around $170 million (including research). What a difference a year makes. Today’s news also leaves the government well short of its 400MW target during round one. The AGL project will create 159 MW of capacity.

This isn’t a blight on Solar Dawn, the Moree Solar Farm or any of the other shortlisted applicants. Merely a point that the more politicians say, the more things stay the same. Three years after Solar Flagships and we have very little to show for a lot of work behind the scenes.