Construction will begin next year and will include the building of a 150 megawatt (MW) photovoltaic power plant in Moree, New South Wales (NSW) and a 250 MW solar thermal gas hybrid power plant in Chinchilla, Queensland.
The Gillard Labor Government will contribute AUD$306.5 million (228 million) towards the Moree project – worth an estimated AUD$923 million (687 million) – and AUD$464 million (345 million) for the project in Chinchilla, worth an estimated AUD$1.2 billion (892 million).
Earlier in the year, the Moree Solar Farm received considerable financial backing from a BP-led consortium, while the Chinchilla plant will be primarily funded by a consortium led by Fench company Areva Solar. Both state governments are also investing in the projects.
The Moree Solar Farm is expected to be the largest photovoltaic plant of its type in the world. Construction expenses are expected to be between AUD$600 million and AUD$700 million (443 million to 517 million).
The government says the projects will provide electricity for in excess of 100,000 households in rural areas of the country, as well as employment opportunities.
This marks the first time in Australia that solar power will be used as a base load energy source, as the nation tries to reach a target of 20 percent of its power from renewable sources by 2020.
Prime Minister Julia Gillard and Resources and Energy Minister Martin Ferguson announced the record level of funding over the weekend, as Solar Dawn and Moree Solar Farm were selected as the two successful consortiums to build the power plants under Round 1 of the Australian Governments AUD$1.5 billion Solar Flagships program.
"Together, Solar Dawn and the Moree Solar Farm will bring Australia closer to a cleaner energy future," they said in a statement. "Investment in clean energy projects such as these will continue to help make industrial-scale solar power more feasible, affordable and viable in Australia."
The state government said the Moree Solar Farm would contribute around AUD$210 million (155 million) to the NSW economy. The plant will operate for at least 30 years, displacing 10.8 million tones of greenhouse gases that would otherwise have been produced by coal burning power stations.
Both solar projects are expected to be completed and commissioned by the end of 2015.
Impact on investment
In the wake of the funding guarantees, one of BP Solars major partners in the Moree project announced it would be considering further investments in the countrys solar power projects.
Spanish-based Fotowatio said that after hearing the news of the Federal governments commitment to the projects, that it would consider additional ventures in the country.
The company told Bloomberg that it plans to add solar capacity in Australia if the government maintains stable policy to stimulate development of renewable energy technologies.
"We dont see this as the only opportunity in Australia," Javier Huergo, Fotowatios head of business development, told Bloomberg. "We think this will demonstrate solar can become an important part of the generation mix and will be ready for the moment when theres a stable political framework that permits developers to make long-term decisions."
The ventures are in advanced talks with major utilities over supply of energy from the plants, which were both selected partly because of their prime grid-connectivity.
Not all good news
Despite the announcement of record levels of funding and development for large-scale solar projects in Australia, various consumer affairs bodies from around the country are also reporting record numbers of complaints for rooftop photovoltaic units.
In the six months to March 30, the NSW Energy and Water Ombudsman’s office received 700 complaints about renewable energy installations, mostly solar-related, it was reported in the press over the weekend.
Over 300 of the complaints were regarding the tariff received for installations, which has been a major political issue over the past few months.
Consumer Affairs Victoria (CAV) reported a total of 570 solar related complaints in May this year, their busiest month to date.
There will also be audits done on installations in Sydney after compliance checks found some of the units installed in the town of Port Macquarie had problems.