Solar thermal power planned for Port Augusta

The South Australian government has contracted US renewable energy company SolarReserve to build a $650 million solar thermal power plant, planned to be the biggest of its kind in the world.

In July 2016, the SA government announced its commitment to procure 25% of its electricity load from dispatchable renewable energy providers in order to drive innovation in storage and other technologies. Two months later, the government launched a tender process to procure 75% of its long-term power supply in order to attract a new competitor into the electricity market, thus increasing competition. The offer from SolarReserve was the lowest-cost option of the shortlisted bids.

Now, SolarReserve has signed a long-term generation project agreement (GPA) to build a 150 MW power station, known as Aurora, near the seaport town of Port Augusta. The 20-year GPA is similar to a power purchase agreement for renewable energy, except that emphasis is placed on the available capacity of the facility during peak demand periods rather than just the energy that can be delivered in kilowatt-hours.

Aurora will deliver power into the National Electricity Market (NEM) at high-value electricity periods, providing additional capacity, energy security and reliability services, as well as competition, into the South Australian market. With 1100 MWh of energy storage capability, the plant is designed to meet the South Australian government’s annual electricity consumption by utilising SolarReserve’s solar thermal technology with integrated molten salt energy storage.

SolarReserve’s concentrated solar power (CSP) technology uses thousands of mirrors (heliostats) to reflect and concentrate sunlight onto a central receiver on top of a tower. The process heats molten salt, pumped to the top of the tower and flowing through the receiver, to 565°C. The molten salt provides a stored heat source that is used to generate steam to drive a single turbine that generates electricity. The facility can generate power at full load for up to eight hours after sunset.

Under normal operating conditions the plant will have a net capacity of 125–135 MW, with the ability to increase that output in favourable conditions, such as in the evening. It will be lower for most of the day, especially outside business hours. Throughout the day, whatever Aurora is producing in addition to the state government’s demand can be sold into the market.

The Aurora Solar Energy Project will thus 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, allowing for greater levels of renewables to be integrated into the system. According to SA Premier Jay Weatherill, it will also “deliver more competition into our energy market and put downward pressure on power prices for households and businesses”.

Energy experts across Australia have praised the project, with ANU Honorary Associate Professor Hugh Saddler calling it “one of the most important milestones along Australia’s transition to a low-emission electricity system”.

Associate Professor Saddler was pleased to learn that the project combines both energy generation and storage in one plant, thus enhancing the reliability and security of the SA electricity grid. He noted that the contract price to the state government of $78/MWh is “not much higher than recent contract wind generation prices and at or below prices … from current solar photovoltaic power stations, neither of which include energy storage”.

“It is also well below the estimated cost of any new coal-fired power station in Australia, and well below the spot wholesale price of electricity in the SA market region, which has averaged between $110 and $120 per MWh since March this year,” Associate Professor Saddler said.

Wasim Saman, a professor of sustainable energy engineering at the University of South Australia, said the significance of solar thermal generation “lies in its ability to provide energy virtually on demand through the use of thermal energy storage to store heat for running the power turbines”, making it “a substantially more economical way of storing energy than using batteries”.

“While this technology is perhaps a decade behind solar PV generation, many future world energy forecasts include a considerable proportion of this technology in tomorrow’s energy mix,” Professor Saman said.

Dr Ariel Liebman, deputy director of the Monash Energy Materials and Systems Institute (MEMSI), said the solar thermal plant will be “a great complement to the range of new technologies now in South Australia and the rest of the nation, such as wind, solar PV and electric battery”. She, too, was a proponent of the storage component, saying, “Being able to store its own energy output in a thermal way — not electrically, such as in the case of lithium-ion — makes this a truly dispatchable renewable technology.”

While Dr Liebman acknowledged that the project would likely be uneconomic without the state government subsidy, she noted that “de-risking early-stage investment is the government’s role, and … more deployment of new technologies will bring the cost down as industry learns how to manufacture and deploy at scale”. She added that we need a diverse mix of technologies if we are to limit climate change to 1.5–2°C.

Dr Liebman did, however, doubt the Premier’s assertion that the plant will lead to lower costs for consumers, noting that at the size of 150 MW, the impact of any downward pressure on wholesale energy prices “will be quite small and it is unlikely to be felt in the end-consumer bill, particularly as the majority of the retail electricity price rises seen over the past 10 years have little to do with the cost of energy generation”.

ANU Research Fellow Dr Matthew Stocks was similarly cautious in his appraisal, stating that the new system will be “an important step” in understanding how solar thermal can contribute to a stable, low-cost, low-emission electrical system.

“One of the big challenges for solar thermal as a storage tool is that it can only store heat,” Dr Stocks noted. “If there is an excess of electricity in the system because the wind is blowing strong, it cannot efficiently use it to store electrical power to shift the energy to times of shortage, unlike batteries and pumped hydro.

“It is not yet clear whether it will deliver a better outcome than wind and solar with electrical storage.”

Professor Samantha Hepburn, director of the Centre for Energy and Natural Resource Law (CENRL) at Deakin Law School, noted other issues with CSP, such as the fact that such a large plant requires access to both land and transmission lines.

“The proposed plant is set to be built 30 km out of town on state-owned land so this will resolve many of these concerns,” she said. Longer term, she said, it will be necessary to monitor the effectiveness of production given the financial subsidies provided by the state and to evaluate the agreement between SolarReserve and the South Australian government.

“In the current phase of renewable transition, however, with higher cost pressure, steady industry development and stronger government support, the project looks positive.”

SolarReserve will establish an Australian headquarters in Adelaide by the end of the year, with construction of the facility set to commence in 2018 and conclude in 2020. The project is expected to create 650 local jobs during construction and 50 ongoing positions, with equipment and services to be purchased across South Australia. SolarReserve will also be establishing a research partnership with South Australian universities to advance solar thermal research and education in South Australia.

Image caption: An artist's impression of the Aurora plant to be built by SolarReserve in South Australia.