Australia: Clean energy funding program attracts 2 GW of applications

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Australia’s large scale solar market is set to shine. The Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) have rolled out complimentary investment and funding programs to kick start the sector at scale, and report a flood of applications.

The CEFC reported today that it has received 2 GW of project applications under its AU$250 program from around 40 foreign and domestic firms looking to develop utility scale solar projects. Projects range in size from 15 MW to 200 MW.

“We have received very strong interest from project developers clearly looking to

further develop Australia’s large-scale solar capacity,” CEFC CEO Oliver Yates said.

By state, the northeast state of Queensland is the source of most applications with 980 MW of projects, followed by New South Wales (620 MW), South Australia (220 MW), Victoria (135 MW), and Western Australia (100 MW).

The CEFC program will provide capital investment to assist projects overcome financing hurdles.

ARENA is currently running a complimentary program that will provide grants for projects. It has set aside AU$100 million (US$71 million) for its utility scale solar scheme. The agency reported today that it has received funding applications worth AU$1.1 billion (US$780 million), for projects worth in excess of AU$5.5 billion (US$3.9 billion). The projects would add 2.8 GW of PV capacity if all realized.

The CEFC’s Yates continued: “Between ARENA and the CEFC we are now examining these proposals and working with the individual proponents to determine whether CEFC and/or ARENA finance is suitable. As with any commercial transaction, we would not expect all projects to proceed to conclusion. However we are very encouraged by the number and quality of proposals. Australia is uniquely placed to meet more of its energy needs from solar power, and the price of solar is falling as technologies improve and developers gain more experience in this area.”

ARENA has indicated that it is targeting projects with a Levelized Cost Of Electricity of AU$180/MWh under its program. With Australia’s high irradiation levels this target appears not particularly ambitious and pv magazine understands that some Australian projects have targeted an LCOE as little as half this.

Environment Minister Greg Hunt said he was “delighted” by the way ARENA and the CEFC are collaborating in these schemes. Hunt recently brought both of the bodies under the administration of his department.

While the Minister’s rhetoric regarding the two bodies has changed completely since Prime Minister Tony Abbott was replaced by moderate Malcolm Turnbull, there is still legislation before the Senate to see both agencies scrapped. There is currently insufficient support in the Senate to see this passed into law, however the Australian Solar Council told pv magazine that the legislation only failed by one vote the last time it came before the Senate and that the threat to both ARENA and the CEFC “remains very real.”

ARENA will select projects it deems worthy of "full applications" by December 16, with the deadline for full applications themselves set for December 16, 2016.

“By all indications, the funding round is on track to significantly boost large-scale deployment across Australia, driving further innovation in the sector and creating efficiencies in Australia’s solar photovoltaic supply chains,” said ARENA CEO Ivor Frischknecht.