Low-cost energy

It's the latest in a series of big wind and solar projects to promise energy at lower prices than a new high-tech coal-fired power station of the kind promoted by former Prime Minister Tony Abbott could manage commercially.

On Monday US company Solar Reserve said it would build a 150MW solar thermal power plant near Port Augusta, South Australia, for $650 million, and sell the power to the SA government for $78/MWh or less.

Earlier this year Origin Energy sold its 530MW Stockyard Hill wind farm in Victoria to China's Goldwind with a deal to buy the power and renewable energy credits for about $52/MWh, and AGL sold its Silverton wind farm in NSW to PARF with a power and credits purchase deal at $65 /MWh.

According to figures compiled by the Clean Energy Council and AFR Weekend, 2600MW of wind and solar projects are under construction or have already been commissioned in 2017 at a cost of $4.6 billion. Another 3190MW of projects worth $$6.35 billion are committed or expected to begin construction this year or in January.

Clean Energy Council chief Kane Thornton (right) says technology had outpaced regulation and standards setting for home batteries. He is pictured with Powershop chief executive Ed McManus at a PwC/Australian Financial Review energy roundtable on 16 March, 2017. Wayne Taylor

More conservatively, Bloomberg New Energy Finance counts about $3.7 billion of renewable energy investment commitments for the first half of the year, and $1.1 billion for the September quarter to date – or nearly $5 billion.

Post-2020 challenge


Smaller-scale solar rooftop installations are not included in these figures and are also running at record levels for the first half of the year, with more businesses installing panels as the price drops.

But the boom in large-scale renewables may not continue after 2020 if the Finkel energy review's proposal to extend the Renewable Energy Target into a Clean Energy Target is not adopted.

Bloomberg New Energy Finance's Kobad Bhavnagri said that from 2020 to 2025 not much new capacity will be needed, because rooftop solar installations by households and businesses will continue to grow and "crowd out the need for large scale" wind and solar.

Solar Reserve plant in the USA. CSP with storage provides real capacity to reliably meet demand during peak hours, which extends well into the night. Solar Reserve

He expects the installed base of rooftop solar to jump from 6400MW by end of this year to 16,100MW by end 2025.

"Without further policy we think there'll be a large-scale downturn from 202 to 2025," Mr Bhavnagri said.

"Without a Clean Energy Target that can finally provide much-needed policy certainty to replace old coal generation and drive down power prices," Mr Thornton said.

Solar power is a no-brainer for a winery, says Sam Barlow, operations manager at Tapanappa Wines. More businesses are installing solar panels as the price drops. Daniel Kalisz