Queensland’s Sunshine Coast Council has predicted that local governments could lead significant growth in Australia’s utility-scale solar market, developing projects to protect themselves and their ratepayers against rising electricity prices.
But the council, which has plans to build a 10MW solar farm, has warned that removing Australia’s Renewable Energy Target – currently under review by an Abbott government-appointed panel – would likely threaten early renewables projects such as its own, leaving consumers hostage to the fortunes of the gas market.
“By maintaining the RET and remaining committed to the program, scope exists for a significant roll out of utility-scale solar by local governments across Australia,” Sunshine Coast said in a submission to the Review panel.
“By doing so, we expect to reach a point where the solar efficiencies delivered allow for projects that are viable in the commercial arena, allowing the more widespread deployment of solar commercially at a cost lower than the current electricity price and without the need for external assistance.
“This scenario would see renewables deliver a real cost saving to all Australian as this would naturally reduce electricity pricing.”
The submission also said it utility-scale solar would help protect the council from electricity price shocks.
“Given that marginal electricity capacity and electricity pricing is largely set by natural gas-fired power station and that Australia is looking to develop a strong gas export market, the real risk remains that natural gas pricing could be subject of price shocks, driving the cost of electricity significantly higher.
“Renewables, particularly solar, acts as a natural hedge against” those shocks, but removing the RET would exacerbate those risks.”
Sunshine Coast said its research had shown that there was only a marginal difference between the cost of the solar project, and the current cost of power it bought from the grid.
Over the long term, however, the solar farm would be cheaper than buying electricity from retailers and would deliver “significant savings” to the council which can then be passed back to the community.
Sunshine Coast, which wants to establish itself as a regional “clean-tech” hub, is the most advanced along the path to utility-scale solar.
It has has previously predicted its proposed 10MW solar farm could deliver a $9 million saving in electricity costs, injecting $10 million into the local economy and creating up to 40 jobs during construction.
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