One would be hard pressed not to have picked up on the decision announced by Alinta to progress the option of stand-alone solar-thermal power for commercial feasibility study. There seems to be a certain “dancing in the streets” vibe from much of the early commentary.
What does this announcement really mean?
It pays to recall where this all began. Back in 2011 Beyond Zero Emissions put forward a proposal in a report called Repower Port Augusta to replace the coal-fired generation (760 MW) with a hybrid renewable option of solar thermal (760 MW) and wind (712.5 MW) to produce 4650 GWh per year.
Concerned as I and others were at how this proposal sought to limit our decarbonisation options, I, along with James Brown, produced Zero Carbon Options to compare the BZE proposal to a reference nuclear option against thirteen criteria. Our overriding point then was this: if decarbonisation through the permanent closure of large fossil fuel generators is the imperative, we are unlikely to reach it by a process of attempting to corral community and political stakeholder support for only one option that lies at the very highest level of cost and other impacts. We have a much better chance by focusing on the outcome and impartially considering our options.
The fact is, stakeholders and particularly market forces simply cannot be corralled in this way if the cost difference is too great, the uncertainties too high and particularly if it is pulling hard against given ideological bents. Outcome-driven processes that are less specific about the solution stand a much better chance.
So, how has the process proceeded to now?
Alinta has announced that it will progress a 50 MW stand-alone solar thermal power tower with energy storage for commercial feasibility. This decision comes from the findings of the first part of the $2.3 million dollar feasibility study which is half publicly funded (Aside: James Brown and I worked hard, unpaid, for about 6 months to produced Zero Carbon Options and then crowd funded $10,000 to print and launch it. End aside).
RePower Port Augusta wanted 1472 MW of new capacity in 2011. Come mid-2014 the process is now down to 50 MW.
The preliminary costs for this option are $15,926 kW-1 installed with electricity priced at $258 MWh-1. This is around double the capital costs of the most famous global nuclear cost overrun at Olkiluoto in Finland and the electricity price is bang-on the range James Brown wrote up for Zero Carbon Options.
Alinta Energy states in the report that commercial development would require “long-term offtake agreements with one-or-more customers to purchase the electricity generated from the CSP” (Alinta Energy 2014, p 19). At $258 MWh-1 that simply won’t happen unless the customer is the Government in the form of a subsidy of greater than 50 %. The volume-weighted average price of electricity for South Australia was $74 MWh-1 in 2012-2013 (Australian Energy Regulator 2013).
Alinta Energy has been upfront in stating that these costs are prohibitive (Alinta Energy 2014, Media Release). Alinta says the commercial feasibility of this option will be studied further “with the due diligence it warrants” to provide information for potential investors “should the cost of technology or regulatory environment change” (Alinta Energy 2014 Media Release).
So, as someone who really likes technology and really wants decarbonisation, what would I be hoping for from here?
I would be hoping that the commercial feasibility delivers a radically improved assessment of the costs. I would be hoping the cost gap closes sufficiently that the required subsidy is a much politically easier challenge. I would be hoping the mechanisms to support renewable energy all make it through this political period unscathed. I would be hoping that somehow the 50 MW build can go ahead, that it exceeds expectations, identifies multiple cost-saving improvements for subsequent expansion and the process gets easier and easier from there.
Hope, however, is not and will never be a plan. All of the above may happen. However I doubt that it will and if it doesn’t? Where does that leave us in the decarbonisation challenge from late 2015?
If, as stated earlier, the goal is decarbonisation, not simply the promotion of some technologies, then the forces marshalled behind this solution for Pt Augusta are making terrible strategic and commercial errors by insisting on limiting our options in this way. It is entirely possible that every bit of effort from every single person (and dollar) behind this campaign will produce little more than studies of one option that won’t get up.
I (and nearly all those I have regular dealings with) am not anti-renewable technology. But the technology must be subservient to the outcome. The outcome stands a much greater chance of surviving the process if we keep our options open. Most especially we need to be open to the only technology South Australia can deploy that is proven to decarbonise large, developed-economy electricity supply.
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