Australia’s largest ever solar power plant was opened yesterday at Greenough River near Geraldton, Western Australia. At 10MW it won’t break too many records in the global solar PV industry, nor raise too many eyebrows in Australia’s conventional power sector.
But by going for something readily achievable, the WA government in conjunction with First Solar, Verve Energy and GE have finally got Australia started on utility-scale solar. Whereas Rudd’s grandiose Solar Flagships and Howard’s moonshot Low Emission Technology Demonstration Program are still to deliver.
Those who think cleaning-up our energy supply is all about throwing money at scientific R&D and massive one-off demonstration projects could learn an awful lot from talking to those behind the Greenough project.
One clear lesson I’ve taken away is that taking small and steady steps can often be a faster way to get to an outcome than trying one giant leap. Smaller steps are easier to achieve and provide the experience necessary to achieve something more ambitious later.
Too small for Solar Flagships turns to an advantage
The concept of developing a Western Australian utility scale solar project began in response to the Solar Flagships program. However WA soon found itself up against a range of barriers that forced the government to improvise.
Solar Flagship’s ‘Hollowmen’ requirement that the projects had to be very large (150MW) immediately made things tough for WA. The northern fringe of WA’s grid has a good solar resource, but transmission capacity is heavily constrained. Also the WA government just wasn’t in a budgetary position to match the $100 million pledges from eastern states for Flagship bids.
But rather than give up, they looked at something smaller, yet big enough to still push the boundaries well beyond what had been done before. And they scrounged around for existing government funding sources to make it happen rather than a bold new funding initiative. Rather than going through a lengthy and convoluted tender process where the winning bidder often fails to deliver, the state government took the simpler and faster route of commissioning Verve to take it on.
The end result is that in spite of no funding from the Commonwealth, they’ve beaten Solar Flagships to the punch by two years. The project was delivered slightly under budget and on time.
Greenough River Solar Farm stretching into the distance
Winning through a focus on the inches
This story of progressing through small increments extends to the construction of the project itself.
This actually goes back several years to the efforts of the Victorian government to develop local expertise and capability for their own large solar project. Out of these efforts the Victorian government and First Solar found a number of local companies capable of delivering components that would be more cost-effective than importing them from First Solar’s existing suppliers.
First Solar’s analysis of Western Australian labour costs and construction productivity suggested savings could be made by shifting some power project assembly into a factory rather than out in the field. A Geelong manufacturer, Haan Australia, looking to diversify beyond a declining automotive industry put its hand up to fabricate ready-to-install assemblies combining eight PV modules as a single unit.
In chatting with Haan’s Robert Backwell he explained how the company also made steady improvements as it gained experience in assembling the modules. According to Backwell, these improvements enabled Haan to reduce the time to manufacture a unit and therefore the labour costs by 35-40 per cent.
Backwell’s excitement over this new business opportunity was palpable. He was already thinking about how he could make further reductions in cost if he was lucky enough to win work out of AGL’s Solar Flagships project in Broken Hill. He felt he could reduce costs through fabricating metal connectors for the assembly himself, save on transportation and stock damage by possibly building an assembly plant closer to the power project, and make adjustments to the design of the module assembly to reduce manufacturing time.
The story of cost leadership through obsessing about the inches was really apparent in discussions with First Solar staff. They treat their power plant construction just like a mass production factory, except it just happens to be in the open air. Each element of the construction process is standardised and refined to reduce time. Construction time for each project component is tracked and benchmarked against their other projects.
First Solar’s emphasis on building-up local expertise and experience rather than relying on imports was especially surprising, but is part of their obsessive focus on streamlined construction. In construction, time is money, and the company believes local suppliers will be faster and more responsive compared to imports that face a six to eight week shipping turnaround time.
During the speeches around the launch I was a bit puzzled by First Solar’s banner proudly proclaiming it was, “The world’s most vertically integrated solar company”. But by the end of visit it made a lot of sense. First Solar knows the only way it will survive against the barrage of Chinese competition is through using experience in building projects, not just manufacturing modules, to reduce its overall cost of generating electricity.
It’s not only coal mining that can employ guys with big beards