SolarReserve has been awarded the contract to supply all of the Government’s power needs, with the project set to boost market competition and put downward pressure on power prices.
A key part of the State Government’s Energy Plan, the 150MW solar thermal power plant at Port Augusta, Aurora, will be the biggest of its kind in the world and create 650 local jobs during construction and 50 ongoing positions.
Construction of the $650 million facility will begin in 2018 and is estimated to be completed in 2020.
The offer from SolarReserve was the lowest-cost option of the shortlisted bids with the Government paying no more than $78/MWh.
Aurora will produce synchronous renewable energy that can be dispatched into the grid when needed - even when the sun isn’t shining. This will have the added benefits of improving grid security and stability, and allowing for greater levels of renewables to be integrated into the system.
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In September 2016 the State Government launched a tender process to procure 75 per cent of its long-term power supply in order to attract a new competitor into the electricity market, increasing competition and putting downward pressure on power prices.
The launch of the tender followed the announcement in July that the State Government would procure 25 per cent of its electricity load from dispatchable renewable energy providers in order to drive innovation in storage and other technologies.
As a large, dispatchable renewable energy generator, SolarReserve provides a single solution that delivers on the goals of both those initiatives.
Under normal operating conditions the plant will have a net capacity of about 135MW, with the ability to increase that output in favourable conditions, such as in the evening.
The Government has entered into a Generation Project Agreement (GPA) with Solar Reserve for the Aurora Solar Energy Project to supply the State’s current load for a period of 20 years.
The GPA contract has been structured to ensure the State gets the benefit of lower spot prices that are expected to arise from the large quantity of renewables entering the South Australian market.
The operation of the contract will improve competition by adding more capacity to the system from a new market participant. In particular SolarReserve will have a strong incentive to ensure its capacity is running at peak times, which will put downward pressure on peak prices for all consumers.