Australian developer Solmessis claims its proposed flagship project, located in the northern state of Queensland, will be all but commercially viable even without government financial incentives or subsidies.
The project, which will directly connect to the grid, envisions an initial phase of 20 MW of photovoltaic capacity to be completed by the end of the first quarter of 2014. Once operational, this will be expanded to a 50 MW and then an 80 MW plus facility.
The company said the current strong Australian dollar combined with the low cost of Chinese sourced photovoltaic cells, means the plant could now be built cheaply enough to compete directly with other forms of power generation.
In an interview with Australia’s Renewenergy.com, Solmessis CEO Hamish Wall estimated that construction costs could now be as little as U.S.$40 million – half the cost per MW of Australia’s 10 MW Greenough River solar farm, which was completed in October this year and is currently the country’s largest.
On top of this, operational costs would be kept to a minimum due to the plant’s low transmission costs, resulting from its location adjacent to a gas-fired plant and existing major transmission facilities. The plant would also reduce running costs by using modularising inverters and transformers, and by keeping labor costs to a minimum.
Altogether these factors mean Solmessis believes it can target a Levellised Cost of Electricity (LCOE) below AU$150 per MWh, enabling it to offer at competitive levels to the Australian grid, while at the same time providing a generous 12% per annum return to investors.
However, some Australian commentators are sceptical, as this would represent such a sharp improvement on the most efficient existing plants, all of which have required grants or subsidized feed in tariffs or power purchase agreements to make them commercially viable.
So far, Solmessis has made an initial development application for just 35 MW capacity. The company said it was planning the project without government support, because going ahead assuming support was too risky given the uncertainty over current and future Australian government policy towards solar and other renewables.
Although Solmessis is the first to provide details, fellow Australian developer Investec has also outlined plans for a photovoltaic farm to be built without subsidies in sunny Western Australia, while a third plant reliant on nothing but renewable energy certificates has also been mooted.
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