Spanish firm Fotowatio Renewable Ventures (FRV) have become the first company to win work from the ACT Government as a result the ground breaking reverse auction. FRV will be installing a 20MW system in Royalla, 23km south of Canberra city over the next two years.
The project will be the largest commercial scale farm in country and is part of the ACT Governments ‘Big Solar’ plan which has set a target of 40MW through solar projects,with a final target of 210MW, including other technologies, by 2016. The ACT Government will release a tender for a further 20MW project at the beginning of 2013.
The winning bid from FRV was $186/MWh, as this is a flat rate tariff the effective rate for the purchase agreement is around $150/MWh in year one – assuming a 3 per cent price escalator. The ACT could have taken advantage of the renewable energy certificates produced from the project to drive the cost down further but has decided to use the certificates to further offset its carbon emissions. This ensures that any reductions in carbon emissions as a result of the ACT Governments solar investments are additional to the targets set by Federal Government.
As part of the agreement with FRV the ACT government will pay the difference between the wholesale cost and the agreed tariff . With the cost of wholesale electricity expected to increase the difference the government has to pay will decease on an ongoing basis. Initially the cost will be 25¢ a week (or $13 a year) per household for this project with forecasts predicting that this will fall to 18¢ or $9.50 a year by 2020.
While the benefits this project will have in moving Australia towards a low carbon economy have been highlighted the benefit to the consumer and the effect on energy bills has not been stated. Interestingly, the winning bid places the market value of the energy generated at $186/MWh or 18¢/KWh, higher than many of the Solar Feed-in Tariffs offered to residential producers of clean energy.
© 2012 Solar Choice Pty Ltd
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