ARENA funding round results highlight falling large-scale solar costs

The final round of bidding for the Australian Renewable Energy Agency’s large scale solar funding program shows the costs of the technology are still falling, the Agency says, and will likely continue to fall.

ARENA – in possibly its last grant funding round before its remaining $1.3 billion of legislated funds are stripped by the Coalition government – says 20 different solar projects totalling 757MW lodged a final bid for a share of the $100 million in grants to be allocated.

The asking price for grants, ARENA says, has fallen to 28c/watt in this round from 43c/watt when expressions of interest were lodged late last year. This compares to $1.60/watt when AGL Energy built the Nyngan and Broken Hill solar plants with the help of ARENA funding last year.

ARENA says the latest round of funding shows that the size of grant funding required to get projects across the line is falling quickly. And that should mean more projects can be funded in this round.

“ARENA is playing a vital role providing bridge funding for projects that will make large-scale solar PV more competitive by increasing confidence and building supply chains,” CEO Ivor Frischknecht said in a statement.

“Our funding round has already reduced costs through competitive tension and encouraged a portfolio of new Australian solar plants to proceed to more advanced stages of planning and development.”

A spokesman said the new round of bidding had shown a “significant” fall in engineering, procurement and construction (EPC) costs between the two rounds. Total project MW ratios had come down from an average of $2.19/watt in the shortlisting stage to an average of $2.11/w in the final applications; or 5 per cent.

The lower bids were also likely supported by announcements from the Queensland and NSW governments that they would write power purchase agreements for 120MW of solar in the case of Queensland, and more than 40MW of solar (92GWh) in the case of NSW.

© 2016 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson