(BN) Biggest Solar Project Falls as Australia Reviews Policy

(Bloomberg ) 

Plans to build the world's largest solar power plant of its kind have been scrapped in Australia after the developers raised concerns about the government's commitment to clean energy.

Solar Systems Pty Ltd. said it suspended plans for a 100-megawatt plant in the Australian state of Victoria. The plant, which would have used concentrating photovoltaic technology to intensify the power of the sun, would have been three times larger than any currently commissioned projects, according to data compiled by Bloomberg.

Australia has assigned Dick Warburton, a former Reserve Bank of Australia board member who has expressed doubts about human contributions to global warming, to head a review of the nation's clean-energy goals. The current target is to get 20 percent of electricity from renewables by 2020, up from about 15 percent in 2013.

The project in Mildura was scrapped because of the review into the target along with lower wholesale power prices according to a statement from Solar Systems, a unit of New South Wales-based Silex, and the Australian Renewable Energy Agency. Funding for A$75 million ($70 million) of conditional support from the renewable energy agency was terminated, the statement said.

Economic Hurdle

"After careful consideration of project economics, we have decided to reassess plans for the Mildura 100MW Solar Power Station," Silex Chief Executive Officer Michael Goldsworthy said in the statement.

Prime Minister Tony Abbott asked Warburton to considering doing away with Australia's clean-energy targets, the Australian Financial Review reported, citing unidentified people. Abbott also has scrapped Australia's levy on carbon dioxide and sought to dismantle institutions set up to help the country limit the pollutants blamed for global warming.

Clive Palmer

Any changes to the renewable energy target would need to pass Australia's Senate, where the balance of power is held by a party led by mining magnate Clive Palmer.

Other clean energy developers have expressed concerns about Abbott's program. Miles George, a managing director at renewable energy project developer Infigen Energy, said the moves would amount to "economic vandalism, pandering to the climate skeptic minority," and that the prime minister is misreading the views of voters on the environment.

Conditional funding of A$35 million for the Mildura project from the Victorian government under the Energy Technology Innovation Strategy Fund also was terminated, Silex and ARENA said in today's announcement.

"ARENA enjoys a good working relationship with Solar Systems and remains open to considering any new or revised project opportunities that are ready for testing and demonstration," ARENA Chief Executive Officer Ivor Frischknecht said in the statement.

Concentrated Solar

The Mildura project was designed to use concentrating photovoltaic technology. Known as CPV, it involves lenses and mirrors that concentrate sunlight on solar panels, multiplying the power they can generate.

The largest CPV plant to be fully commissioned is a 30-megawatt facility in Colorado operated by Cogentrix Energy LLC, Bloomberg New Energy Finance data show.

A 44-megawatt plant has been partially commissioned in South Africa and a 50-megawatt project in China obtained financing and began construction in 2012, according to London-based BNEF.

A 1.5-megawatt demonstration project in Mildura began feeding electricity to the grid in June 2013. Solar Systems is exploring alternatives to develop the Mildura site on a smaller scale, according to the statement.

Earlier this year, the Silex unit completed a CPV project near Riyadh in Saudi Arabia, the first outside of its home country of Australia.

The 1-megawatt solar facility at the Nofa Equestrian Resort comprises 28 large dishes supplying electricity to an internal grid, replacing diesel generation, Solar Systems said in an e-mailed statement at the time.