Australia’s largest developer of renewable energy projects AGL, says it will build solar power plants worth $450 million with First Solar.
The Australian reports that the projects will include a 102 megawatt solar plant at Nyngan. This will be the biggest in the southern hemisphere and it will be operational by 2015.
In addition, there will be a 53MW plant at Broken Hill, which is also targeted for a 2015 completion date.
The projects were made possible because of the granting of an extra $37m of federal government funding. This means that over half the development cost will be provided by the federal and NSW governments.
According to AGL, the solar panels needed to support the plants will fill an area 185 times the size of the Sydney Cricket Ground.
AGL chief Michael Fraser pointed out that the extra funding had been granted because of lower electricity prices and said that it meant that the company would be able to earn more than its required 12 per cent internal rate of return for new projects.
According to Jack Curtis, First Solar's head of Asia-Pacific business development and sales, such large scale solar power projects are still not viable without government assistance.
However, he said that First Solar had reduced costs by up to 80 per cent since building its first plant in the US five years ago and that costs in Australia would also drop.
"The first solar plant in any country is always the most expensive, just because the experience isn't there to execute them in a way that's as cost-effective as in other markets," Curtis said.
Meanwhile, SMH reports that First Solar is also seeking further assistance for the expansion of its Greenough River project in Western Australia.
Curtis said in an interview he hoped that the federal government will provide assistance to expand the capacity of the General Electric and Verve Energy-owned project to 40MW.
“We're pretty confident that the federal government would view that as a very likely candidate for future support since the economic value proposition would be compelling,” Curtis said.