Australia's reverse solar auction delivers 'remarkable' results

Australian Capital Territory (ACT) energy minister Simon Corbell hopes the territory’s reverse auction for large-scale solar will serve as a template for programmes at the national level, claiming it is already delivering "remarkable results".

The ACT government will not be releasing results of its first auction for large-scale solar for another couple of weeks, Corbell tells the Australian Solar Energy Society’s East Solar conference in Melbourne.

“But what I can tell you today is that Canberra’s Big Solar auction is already delivering some remarkable results,” he says.

Under the scheme, the price to be paid for electricity generated from successful projects will be set by a competitive bidding process.

From a total of 49 proposals from 27 proponents, 10 projects from six qualified for the initial “fast- track” auction for 20MW.

Another 20MW will be auctioned in July 2013, with further allocations up to a maximum of 210MW available for deployment under the scheme to 2016.

“The large-scale feed-in tariff operates on a reverse-auction basis, [which is] expected to support the installation of the most efficient and the most effective large-scale generation, and at the lowest cost,” Corbell says.

“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,” he adds.

Although the ACT is small in comparison to Australian states such as New South Wales and Queensland, the pricing of the tenders will be closely watched.

The results could signal that large-scale solar PV is able to compete with wind towards the 2020 renewable energy target (RET) of supplying 20% of the nation’s power needs from renewable sources.

“Unlike the federal government’s Solar Flagship process, the ACT scheme leaves the risk of deployment, including technology, ‘siting’ and land acquisition, planning and development approvals to the proponent, with no upfront taxpayer subsidy required,” Corbell says.

The feed-in tariff is not paid until the project is generating power.

“Secondly, the feed-in tariff scheme has the ability to bring forward the deployment of large-scale renewable generation, which would otherwise not yet be viable," Corbell claims.

“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 says.