Australian government unveils 1,000MW solar strategy

The Australian government has given an unexpected boost to the country's embryonic solar power industry this week by committing A$1.35 billion to the construction of four large scale solar plants totaling 1,000MW in capacity by 2015.

The announcement of the Solar Flagships program, contained in the government's budget papers for 2009/10, came just one week after it faced criticism from green groupd over its decision to delay the introduction of its emissions trading scheme by 12 months to July 1, 2011.

The announcement took local solar industry players completely by surprise. " It's extremely exciting," said Bob Matthews, the chief executive of solar firm Ausra Australia. "We haven't always congratulated the Australian government for being so visionary but this could make Australia a solar superpower."

Ausra was founded by Australian researcher David Mills, but he left the country in 2006 to re-establish the company in California because of a lack of support for renewable energy programs by the previous Australian government.

The Solar Flagships project will require four solar installations using differing solar technologies, two from the solar PV sector, and two based on solar thermal technologies. The program effectively subsidises one third of the estimated cost of the installations and will play a major role in ensuring the government meets its target to generate 20 per cent of energy from renewable sources by 2020.

Ausra is currently partnering with several different established utilities for the development of various solar thermal projects under an alternative and much smaller government program, although these plans are now likely to be scaled up in response to the Solar Flagships initiative.

Another company likely to benefit from the new project is Solar Systems, a privately-held company based in Melbourne, which is currently building a 154MW solar PV station in Mildura, a regional town in the state of Victoria, which is due for completion in June, 2010, as well as a solar PV manufacturing facility with a capacity of 500MW.

Meanwhile, Australian engineering group Worley Parsons has also expressed an interest in building solar power stations, including for remote mining installations.

A number of fossil-fuel based energy firms could also play a role in the new intitiative as they seek to diversify their energy mix.

Ausra has a 12MW pilot plant with the state-owned Liddell coal-fired power station in New South Wales, while Hong Kong-owned TRUenergy, the owner of a
brown coal-fired power station and several gas-fired generators, bought a 20
per cent stake in Solar Systems last year.

One of Australia's largest energy companies AGL, which also owns a stake in the Loy Yang A brown coal-fired generator, has the largest investment in renewable energy technologies, mostly wind and hydro, while Origin Energy has a portfolio of gas fired generators as well as investments in wind, solar and geothermal.

The government said the entire solar flagships program would be project managed by a single entity, most likely a company with existing energy generating capacity.