Growing momentum for CST in Australia

In the context of the recent decision to build a 150 MW solar thermal power plant with 8 hours of full-load thermal energy storage to diversify and stabilize South Australia’s electricity system, followed by its development approval earlier this month, concentrated solar thermal energy is experiencing increasing interest from different government entities and companies in Australia.

Earlier this year, the Australian Renewable Energy Agency (ARENA) invited prospective industry participants to provide information on the costs and benefits of Concentrating Solar Thermal “as the first step in exploring how concentrated sunlight could generate reliable, affordable renewable energy with built-in storage for our national grids.”

ARENA CEO Ivor Frischknecht stated that “the benefits of CST will become increasingly important as more renewables enter our grid, particularly in regions like South Australia that already have high levels of wind and solar PV generation.”

He pointed out the key advantages of Concentrating Solar Power over solar PV and wind, namely the ability of providing dispatchability through built-in low-cost thermal energy storage as well as that of contributing to the network stability by adding inertia to the grid. These advantages provide additional value to utilities and grid operators beyond merely adding MW’s in capacity.

“These fresh efforts will seek to map out and support a pathway for CST to achieve commercial viability in Australia,” Mr Frischknecht said in the media release.

ARENA is joining forces with the Clean Energy Finance Corporation (CEFC) in promoting CST to potentially become the next large-scale renewable electricity (and process heat) technology to reach the breakthrough in the marketplace.

CEFC CEO Ian Learmonth stated “together, ARENA and the CEFC have helped transform large-scale solar in Australia, contributing to a substantial increase in Australia’s renewable energy capacity. CST has the potential to be an important part of Australia’s clean energy transition as this emerging technology reaches commercialisation.”

Meanwhile, the Queensland Government has published its “Powering Queensland Plan”, outlining a strategy to transition to a cleaner energy system, while also securing energy affordability and reliability and creating local jobs and investment opportunities. The $1.16 billion transition plan aims to reach the state’s renewable energy target of 50% by 2030.  The plan is based on the Renewable Energy Expert Panel report published in 2016, which points out the benefits of CST mentioned above on several occasions and has received feedback from several stakeholders “highlighting the value of dispatchable renewable energy technologies.“

In particular the plan’s three goals “to create ‘CleanCo’ (a clean energy generation company) to operate Queensland’s existing renewable and low-emissions energy generation assets and develop new renewable energy projects”, “to facilitate the next wave of up to 400 megawatts of diversified renewable energy, including 100 megawatts of energy storage through a reverse auction” and “to establish the Queensland Energy Security Taskforce” are likely to take CST into account as a possible technology option to maintain the state’s energy security while replacing old coal power stations with renewable energy.

More recently, during a visit to the Clare solar farm site, the premier, Anastasia Palaszczuk, announced that the Queensland government is offering a down payment of $50 million to “kick-start” the realisation of a solar thermal power plant with thermal energy storage.

Daniel Thompson of SolarReserve, the company that won the tender to build a 150 MW CSP plant near Port Augusta, SA, stated the company was in “very positive discussions with the Palaszczuk Government and that an application for a concessional loan from the Federal Government’s $5 billion North Australian Infrastructure Facility (NAIF) was an option.”

Around the same time, Australian renewable energy developer CWP Renewables proposed a 250 MW solar tower plant with 12 hours of thermal energy storage in a location near Townsville at an estimated capital cost of $1.3 billion.

In addition to the increasing political momentum for new low-carbon and secure electricity production in Australia, CSP is also gaining additional momentum in the world as a result of rapid cost reductions in major components such as thermal energy storage systems and increasing access to higher energy tariff periods. While SolarReserve’s 20-year power offtake agreement with the South Australian government for the Aurora CSP plant at an effective cost to the SA Government of $78/MWh1 may have taken some people by surprise, for other large-scale projects in the world, such as the 700 MW ACWA Power CSP project in Dubai, similar offtake energy prices have been reported. Based on these recently reported numbers, experts predict that in ideal locations with Direct Solar Irradiation over 2500 kWh/m2 per year, as it is the case in large parts of Australia, levelized costs of electricity below USD50/MWh (AUD65/MWh) could be reached sooner than even the CST industry had projected. The acceleration in CST cost reductions evidenced by these recent projects appears to support far more rapid cost reductions for CST than have been forecast in recent Australian energy cost projections such as the Australian Energy Technology Assessment, and National Transmission Network Planning scenario analyses.

Under these premises, solar thermal power with energy storage seems very likely to play a central role as a clean, cost-effective, short-term-dispatchable power generation technology in future energy systems of Queensland and Australia as a whole.

1 This figure is not to be confused with a levelised cost of electricity. The LCOE could be estimated based on the predicted energy production of 495 GWh per year and the plant’s headline cost of $650m. 

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Contact Details

Australian Solar Thermal Energy Association Ltd
ACN: 149 005 210
PO Box 6127
ACT 2602, Australia