SA Premier hailed “leader”: govt buys twenty years electricity at twice the price for solar

UPDATE: More details are coming in: The SA govt is effectively covering all its own electricity use with this one plant, which is about 5% of the whole state’s demand. The plant will have 8 hours of battery storage (theoretically). The word I hear is that this is not an outright purchase of $650m, but an offtake agreement for around 70-78/MWh — which means the government will buy nearly all the production available (125Mw of 150MW) each year, but won’t own the plant. [Text edited and substantial additions below.]

Not long back, Port Augusta had a thirty-one year old coal plant generating 520MW. The Premier could have spent $30 million to keep it going through this anti-coal political era. Instead he blew it up and is spending millions to buy electricity at twice the price, under contract for 20 years. The $650 million Aurora Solar Plant will produce 150MW of solar power (on a good day). Per megawatt, this solar power is twice the price of coal fired power. (The old Hazelwood coal plant supplied electricity at around $30MWh.) Per degree Celsius, it will buy global coolness by some number starting with three decimal places of zero.

Solar power is supposed to be competitive with coal, but no private company seems to keen to do this. In this case, the company is getting a signed up buyer for around 80% of its product, and for 20 years. Of the 150MW of sacred solar electrons, 125MW will go to the government itself and just 25MW will be left over for non-government customers. If South Australians wanted to vote for cheaper electricity, this is another 5% that out-of-reach.

To put this in perspective $650 million dollars is around $400 per man, woman and child in SA, over the next ten or twenty years, to appease the climate Gods. The exact cost is hard to calculate at this stage. But the government of SA will be the one sole major customer, effectively paying off the solar farm, but won’t own it in the end.

The original Northern Coal Power station employed 250 people. The new solar one will give 700 people a pointless but paid position for three years, after which, only 50 people will have a job at the solar plant, and countless others will be out of work as more businesses close down in South Australia due to the price of electricity.

Praise flows in:

The Australian Services Union hailed Mr Weatherill as “the unequivocal international leader for clean energy generation”.

Independent SA senator Nick Xenophon and Pt. Augusta Mayor Sam Johnson said the deal will be “transformational”.

It will be “transformational” like a dose of Dengue Fever.

Will South Australia ever recover?

The project is underpinned with a $110m concessional equity loan that Senator Xenophon negotiated earlier this year as part of the talks over the federal government’s company tax cuts legislation.

Time for WA to secede and cut the financial lifeline that makes these kinds of decisions possible.

Put it in your diary, Malcolm Turnbull gets something right:

The announcement comes after Malcolm Turnbull told the South Australian Liberal Party annual meeting on Saturday that the state’s strong focus on renewable energy was equal parts “ideology and idiocy”.

The Prime Minister said Mr Weatherill’s energy policies were an “experiment’ that should have been conducted in private, not inflicted on an entire state”.

TonyfromOz in Comments: This is not nor has it ever been baseload power

Nick Xenophon said this: (my bolding here)

“This will make a difference in the South Australia energy market. It will secure the grid and mean more baseload power than intermittent power,” he said.

The Base Load for South Australia is at around 4AM every morning, every morning, and averages around 1100MW. The total amount of power that will be generated and delivered by this Concentrating Solar Power (CSP) plant at 4AM on ANY morning, even at the height of Summer will be …..

ZERO MEGAWATTS

There is not one plant of 150MW Nameplate on Planet Earth which has EVER generated 24 hour power, and this plant will not be the first to do it. If you want some facts on CSP, you only need to see how poorly it works in Spain, and I have some information on just that at the link below. This is just another joke from a Government that has no idea at all.

Solar Thermal Power (Concentrating Solar) Fail – Just Look At Spain

South Australia won’t need too much cable,

With less power, very dear and unstable,

And must learn to cast lots,

For the few megawatts,

Of crumbs from the Great Leader’s table.

– Ruairi

EDITED: The original headline was: SA Premier hailed “leader”: spends 20 times more to make one third of the electricity with solar — based on a comparison of spending $30m to keep Northern Coal running, or $650m to build a solar plant. With an offtake agreement, the unknown extra cost is spread over 20 years, and must end up being more than $650m in total. The SA government is buying most of the product; the Aurora project investors will expect some profits, plus there will be interest payments on the loans — all of which needs to be covered. Last year the SA government was asking for a tender for 480GW of electricity per year for government sites (but it’s not clear if this was the total demand). Hypothetically, if it was, the bill for getting that at a cost that was $40MWhr higher is about $20m extra dollars per year (please check my maths). Partly this is also funded by a federal govt concessional equity loan ($110m), not just funded straight up by SA taxpayers.

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