Despite the obstacles, the free market just saved South Australian’s $110 million dollars
The Aurora Solar Thermal plant was going to be the biggest one in the world, but they couldn’t find enough private investors so it’s just been scrapped. That is despite the SA government being willing to give $110 million dollars, and the state being one of the sunniest, richest places in the world and with people already paying obscenely high prices for electricity. If Big-Solar could make it anywhere, surely there is no easier place on Planet Earth than in coal-less South Australia where competition from cheap reliable power has been completely extinguished?
A $650 million solar thermal power plant planned for Port Augusta will not go ahead after the company behind it failed to secure commercial finance for the project.
Despite all those fixed, unfair advantages, the market didn’t want to pay up for a 150MW bird frying power plant that would cost $650 million and probably only produce 30MW effectively. (The company’s prototype was Crescent Dunes which had a capacity factor of only 16%). Possibly investors also weren’t enthused about the dismal operation record of that smaller sister plant in California which was beset with maintenance issues and failed for one third of the time in its first two years. That 110MW plant cost $1.3b in 2015 and produced electricity at $178/MWh, nearly 6 times as pricey as the 53 year old Hazelwood coal plant managed in its last month of operation.
It was such a bad deal the government did everything it could to help:
Mr van Holst Pellekaan said the Government had done “everything it possibly can to support this project”, including extending deadlines, agreeing to changes to the project to add photovoltaic solar panels and introducing SolarReserve to potential financiers.
Earlier in 2017, the Federal Government confirmed it would grant $110 million in a concessional equity loan to support the project
The opposition (the same party that proposed the plant in 2017) blame its demise on the proposed $1.5b interconnector to NSW:
Opposition Leader Peter Malinauskas blamed the scrapping of the solar thermal power plant on the State Government’s plan for an interconnector to New South Wales.
He said the interconnector project, due to be completed by 2022, prioritised another state’s “dirty coal power over South Australian renewable power”.
“That was a bad decision and the people that are going to pay the price are the Port Augusta community, but also South Australian power consumers,” he said.
The unfree market can’t save us from stupid big government
That interconnector is a $1.5 billion project that will allow South Australia’s erratic electricity to help destroy baseload power in New South Wales just like it did in Victoria. Electricity prices are predicted to fall, but SA already has one interconnector to Victoria and prices have only gone up everywhere within 1,000km of that.
It takes big national planning to make big problems. Indeed, without the Heywood interconnector SA couldn’t have managed a state-wide blackout in 2016.
In the real economy, $1,500 million dollars buys a lot of electricity, or 6 gas fired plants, or most of one large advanced coal plant that could produce 2000MW of cheap electricity for 50 years (or indefinitely, as long we keep the maintenance going).
Kids are running the country.
h/t to Steve Hyland, Bill in Oz, Original Steve. Plus thanks to Graeme No 3 and AndrewWA in past comments for their help. And from TonyfromOz who says: “Everything about this SouthAus plant is the hyped to the max best case scenario that NO plant on Planet Earth has achieved yet…”