ActewAGL turns the heat up on solar plans

Canberra Times
Thursday 9/4/2009 Page: 5

ActewAGL will bid to build Canberra's first solar energy plant when the ACT Government calls for expressions of interest later this month. The Government has already committed to subsidising the project - which will have the capacity to power at least 10,000 homes - by $30 million. ActewAGL managing director Michael Costello told The Canberra Times he was confident ActewAGL could deliver an economically viable solar energy plant, but expected no preferential treatment despite his company's ties to the Government.

"We are very confident, we know we can do it quickly, effectively and on a good scale," Mr Costello said. "But we are only one bidder, and if someone has a better bid than its then they should win." The successful bid is expected to cost more than $150 million, and require an area the size of up to 20 football fields." ACT Environment Minister Simon Corbell said yesterday the expressions of interest guidelines would require that the project be built in the ACT, and that it generate 22MW, or enough electricity to power 10,000 homes.

Like all commercial power generators in Australia, the solar farm would not directly power 10,000 homes. Rather, the electricity generated would have to go into the national grid, and then the operator would have to buy back the power. Mr Corbell said ActewAGL would be considered equally with any other bidders. ActewAGL had jointly conducted the feasibility study with the Government, but the Government had then severed ties between ActewAGL and the project and opted to put it to tender.

"The Government took a very explicit decision last year that ActewAGL would no longer be involved in the development of this process or the Government's policy on it," Mr Corbell said. The $30 trillion subsidy could be in the form of land, as the Government had identified a number of ACT-owned sites for the project. However, proponents could still identify their own sites, and their submissions would be considered.

"We'll be identifying some possible sites for a facility, but we won't be constraining proponents to those particular sites. "We would envisage the cost of the land could potentially be part of the $30 million worth of assistance. It would depend on the nature of the proposal that the proponents put forward."

Although the Government had committed to building a solar farm before the election, the $30 million pledge was one of several sustainable energy initiatives the Government entered into in its parliamentary agreement with the Greens in exchange for their support to form Government after the October 18 election. Another incentive the Government might offer is to extend the recently-introduced solar feed-in tariff - which pays households with solar energy a premium price for the electricity they generated - to the solar farm.

Mr Corbell said this was one option the Government was considering as stage two of the tariff, which at the moment would not extend to a commercial solar facility. Mr Costello said ActewAGL would factor the potential application of the tariff to the solar farm in its modelling for its submission to the tender process. The company would also apply for Federal Government subsidy for the project.