Silex’s mega-solar project powers up

It's been a long journey, but Silex subsidiary Solar Systems now has the 1st stage of its Mildura concentrating solar project feeding electricity into the grid. And it is promising costs that will beat wind power.

Silex Systems took an important step yesterday to developing what was billed in 2006 as the second largest solar power project in the world. 

Its 1.5 megawatt demonstration facility in Mildura has now been fully commissioned and is feeding electricity into the grid. This facility is intended to validate the performance and reliability of the technology essential for bank financing.

All going well Silex will proceed with a 100MW plant that would be Australia’s equal-largest solar project to date. Although in the seven years that have passed since the project was originally announced, it has dropped well back from being the second largest solar power plant in the world.

The demonstration facility, pictured below, is composed of 40 dishes of mirrors which act to concentrate the sun’s energy by 500 times onto solar PV cells developed for satellites. These are more than twice as efficient at converting sunlight into electricity than the best conventional solar panels installed on rooftops. 

Silex’s Solar Concentrating Dish Project in Mildura

Graph for Silex’s mega-solar project powers up

The aim is that by concentrating the sun’s energy through relatively low cost mirrors, combined with very efficient solar cells, Silex can bring the cost of solar electricity down to $100 per megawatt-hour (MWh). This is about the same cost as the cheapest renewable energy – wind power.  However given the plant would generate power during daylight hours, its electricity would be of higher value.

This would be an incredible achievement.  But given how fast conventional flat plate solar technology has been dropping in price, it is essential for the commercial viability of Silex’s solar technology.

According to Silex CEO Dr Michael Goldsworthy, the current version of the plant operational in Mildura has already achieved a levelised cost of $150/MWh. Given this, Goldsworthy is confident that with further incremental improvements and a sunnier location further north of Mildura, they can cut that down to $100/MWh.

For those that have followed the saga of Solar Systems (who were taken over by Silex) over the years, this has all been a long time coming.  The dishes in Mildura on an initial glance don’t look all that different to ones installed in a number of remote central Australian Aboriginal communities back in 2003. 

The cost of these dishes was a long way north of $150/MWh. According to Goldsworthy, it was closer to $300/MWh. But the technology still looked promising given the extremely high price of solar cells at the time. This was further reinforced by skyrocketing prices for solar-grade silicon in subsequent years.

In 2006 Solar Systems was then awarded a grant of $75 million from the Howard government as well as $50 million from the Victorian government to build a 154MW power plant in Mildura. This was intended to take the technology from dishes to another level of scale using large fields of mirrors focussing sunlight onto a PV module located on a central tower (an idea subsequently dumped).

But according to former staff within Solar Systems, the level of growth the company tried to achieve proved extremely challenging. Then the Global Financial Crisis hit and the investor dollars keeping the company alive dried-up. 

Energy Australia (TRUenergy at the time) pulled out as the foundation stone customer and major equity investor for the Mildura project. The company then went into administration and was taken over by Silex Systems – a company focussed on commercialising a breakthrough uranium enrichment technology.

At the same time, the price of silicon plummeted from nearly $500 a kilogram to $25, a price where it has remained. Suddenly the idea of using steel and mirrors to avoid the use of silicon solar PV cells didn’t seem so promising.

It is a great credit to Silex Systems that it has persisted with the technology, in the face of huge drops in the price of conventional solar panels. 

Goldsworthy explained that the dishes installed in Mildura may look similar to the original Solar Systems dishes, but the differences are vast. Two-thirds of the components have been revamped or redesigned. The solar PV cells are 22 per cent more efficient in converting sunlight to electricity. The cooling system (vital to keep the solar cells operating at an optimum temperature for efficiency and to stop them from melting) uses less energy and is more robust. And the dishes are now manufactured through an automated plant instead of by hand.

All of these incremental improvements have enabled Silex to substantially increase the amount of power from the dishes while reducing costs. The end result he claims is power that costs less than half that of the original dishes.

If Silex actually manages to achieve the $100/MWh cost Goldsworthy believes is likely, then large markets open up in dry sunny regions. This would include Australia, south-west US, and the Middle East. Silex also has another 28 dish plant under construction in Saudi Arabia eying precisely this market. The hope being that the Saudis realise it’s better to sell their oil on the open market than burn it to make power at hugely subsidised prices.

As we’ve learnt over the years in this field it’s best not to count your chickens until they’ve hatched. But thankfully after 12 months of operation at Mildura and then Saudi Arabia we’ll know whether the promise is likely to become reality.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles