ACT Reverse-Auction Feed-in Tariff ‘winners’ to be announced in coming weeks

The winning applicants of the Australian Capital Territory’s Reverse-Auction Feed-in Tariff, whose first round for 20 megawatts (MW) of capacity received 49 proposals in April this year, will be announced in ‘a few weeks’, according to ACT Energy Minister Simon Corbell, speaking at the East Solar conference in Melbourne this week. Under the Reverse-Auction FiT, solar project developers set the Feed-in Tariff rate to be offered by competitively bidding against one another.

Players in the utility-scale and commercial-scale solar power industry, as well as government bodies and not-for-profits interested in renewable energy are waiting in eager anticipation the announcement, whose results could set the tone for the industry nationally and open the floodgates for large-scale solar power across the country if successful. For this reason, the ACT, although small compared to other states and territories, will have an influence on the state of large-scale solar power in Australia disproportionate to its size.

Minister Corbell offered little in the way of specifics about the projects, but said that he expected the territory’s program to produce ‘remarkable’ results, echoing in his remarks the campaign phrase used by not-for-profit group 100% Renewables: ‘Let’s build Big Solar‘. “When the price is known, it will be time for the rest of Australia and in particular the Federal Government to reconsider its approach to supporting Big Solar, and establish a reverse auction process to make Big Solar happen at the national level,” he was quoted as saying in RenewEconomy.

Corbell went on to say: “The large-scale feed-in tariff … [is] expected to support the installation of the most efficient and most effective large-scale generation, and at the lowest cost”, according to Recharge News. He expects the Federal Government to reappraise its future approach to supporting large-scale solar once the ACT announces its results. “When the price is known, it will be time for the rest of Australia, and in particular the Federal Government, to reconsider its approach…and establish a reverse auction process to make Big Solar happen at the national level.”

“By having a price-for-difference mechanism in place, where the level of feed-in tariff payment reduces over time as the wholesale price of electricity rises, the cost to electricity consumers is minimised. Yet deployment happens more promptly than if generators were waiting for the price differential to close,” he continued.

The ACT’s Reverse-Auction FiT program has been contrasted with the Federal Government’s Solar Flagships program, whose projects have been slow to come to term. The Solar Flagships program subsidises the up-front cost of building utility-scale solar projects, requiring that applicants jump a number of hurdles in order to be selected for the funding. The ACT’s approach is much more dynamic than Solar Flagships, placing the onus to provide cost-competitive solar power on the project developers themselves after the project has become operational. The ACT government does not need to provide any up-front funding for the projects; taxpayer money is therefore not at risk should the project fail to deploy.

© 2012 Solar Choice Pty Ltd

James Martin II