Port Augusta's solar thermal setback

Federal backing for Alinta Energy’s proposed solar thermal addition to its Port Augusta coal-fired power stations will not be forthcoming – at least not any time soon.

The Australian Renewable Energy Agency advised Alinta this week that it had not been successful in its request for funding of a full feasibility study.

“Given the identified potential for solar energy development at site, Alinta Energy is disappointed by this outcome but acknowledges the significant challenges to full-scale commercialisation,” Alinta said in a statement.

“Alinta … will revisit potential opportunities at Port Augusta as technologies continue to mature and the policy environment becomes more certain.”

The story promised a lot – two coal-fired power stations getting a rebirth thanks to the help of new, clean technology – but the plan was always fighting headwinds. The most crippling being cost and while Alinta was always publically keen to make the development happen, it was clear it didn’t want to risk too much capital in doing so.

As a result, the campaigning for the development has largely been the domain of not-for-profits, whose success in drumming up strong community support has not been enough to see the project progress past the pre-feasibility stage.

The ARENA decision has been a couple of years in the making after the idea was first floated on the back of news of the federal government’s clean energy future package.

“We’re exploring the idea of building a renewable facility and integrate that with baseload (from the remaining northern station) and solar thermal would be ideal, as there a good sun resource in the region,” Alinta CEO Jeff Dimery told Climate Spectator at the time. “The technology requires funding, and it’s a case of needing to convince government that it is one of better projects. We intend to explore it.”

The original plan was to use money on offer from the government through the contracts-for-closure scheme to bankroll a solar thermal development at the Playford B and Northern power stations. When this scheme was canned last year, Alinta then turned to the newly formed ARENA to provide the funding it viewed as necessary to de-risk the development.

In a statement provided to Climate Spectator, ARENA did not disclose why the project failed to meet its criteria for funding but it's likely it viewed the request for cash as being too high – either now or looking forward.

Last November, Dimery said Alinta was seeking $65 million of the expected $200 million cost of the development to come from federal government coffers. ARENA, meanwhile, is stumping up $2.5 million for a feasibility study of a similar development – at the Collinsville power station in Queensland. 

Despite the rejection, ARENA maintains its “door is (still) open to Port Augusta.”

The key is likely to be found in a deeper Alinta pocket.