Australia: Carbon tax kicks in while 250 MW CSP project in doubt

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The 250 megawatt (MW) Solar Dawn CSP installation would be one of the largest applications of the technology in the world. It is planned to be located in Chinchilla, in the north-east Australian state of Queensland. However it is now in doubt with the recently-elected Newman Government saying that it plans to withdraw the AUD75 million (US$77 million) in funding it was to contribute to the project.

The Newman Government has withdrawn support for the photovoltaic Solar Flagships projects in its state, scrapped a host of environmental funding programs, another smaller photovoltaic power plant project and also wound back the FITs paid to businesses and residential consumers, since taking office in March. It now is arguing that because of the new carbon tax introduced by the Federal Government, which has just come into effect, it will also withdraw support for the Solar Dawn project.

The Federal Government has committed to supplying AUD475 million for the large-scale CPV plant, with the previous Queensland Government committing a further AUD75 million. It is scheduled to be completed in 2015. All funding for the project is now in doubt, as the new state government’s withdrawal of support will leave a very big hole in the project’s funding.

The University of Queensland has developed AUD60 million-research project linked to the Solar Dawn. Paul Meredith, the university’s renewable energy research head, said that the "worthwhile" project might not go ahead given the change of tack. "I think it is anybody’s guess what the Federal Government will do [given the Newman Government’s withdrawl]," said Meredith.

The Federal Government and also the local Western Downs council, where the Solar Dawn was to be located, have been critical of the Newman Government’s stance. The Australian Broadcasting Corporation reported that mayor Ray Brown said that planning for a future with a reduced reliance on fossil fuels will be hurt. "Look, to remove that funding, [there’s been] no future planning in my books," said Brown.

Queensland newspaper the Courier Mail has reported that the State Government was able to terminate its funding as a PPA had not been signed between the Solar Dawn and the state-owned electricity utility Ergon.

Premier Newman has also been reported as saying that his government will support the Solar Dawn if the carbon tax is scrapped.