Goal: Create more electricity generation to increase competition and put downward pressure on prices.
Every year, the State Government pays millions of dollars to power hospitals, schools and government services.
The government is using its buying power to make the local energy market more competitive and stimulate investment in the right types of generation.
New electricity generators will enter the South Australian market as a result of the State Government tendering 75 per cent of its electricity needs over the next 10 years.
It is anticipated this procurement will result in construction of a new privately owned generator in South Australia.
Increasing competition in the energy market is the best way to drive down power prices for South Australian households and businesses.
More dispatchable renewable energy
Energy that can be dispatched as it is needed helps to provide energy security. Large-scale storage transforms renewable energy into dispatchable energy.
As part of South Australia’s renewable energy transformation, the government is tendering the remaining 25 per cent of its electricity load to support dispatchable renewable energy initiatives.
LATEST NEWS - AUGUST 14, 2017
PORT AUGUSTA SOLAR THERMAL TO BOOST COMPETITION AND CREATE JOBS
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.
The 150MW solar thermal power plant at Port Augusta, called 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.
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.
Peak Government load is as high as 125MW but lower for most of the day and far lower outside of business hours. Throughout the day, whatever Aurora is producing in addition to the State Government’s demand can be sold into the market which will help other consumers.
The Government will pay an expected levelised price of $75/MWh, and no more than $78/MWh.
SolarReserve’s concentrated solar power 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 degrees Celsius.
The molten salt provides a stored heat source which 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.
LATEST NEWS - DECEMBER 18, 2017
GOVERNMENT BRIDGING CONTRACTS
SIMEC ZEN Energy, a new South Australian electricity retailer, will supply the State Government’s power needs until construction of the solar thermal plant at Port Augusta is complete.
Under the contract, SIMEC ZEN Energy will supply more than 80 per cent of the Government’s electricity needs in 2018. This will escalate to 100 per cent in 2019 when it will be backed by local renewable energy projects.
The State Government will be SIMEC ZEN Energy’s first electricity customer. This is expected to help SIMEC ZEN Energy attract other customers, bringing much needed competition to the retail electricity market and putting further downward pressure on prices.
The contract with SIMEC ZEN Energy offers competitive prices, and a commitment to working with the State Government to identify opportunities to save energy and reduce power costs. Some of these opportunities will lead to improved demand management practices across Government sites, further improving the reliability of the grid by reducing system load during periods of high demand.
In addition, SIMEC ZEN Energy will also provide the State Government with ongoing retail services for five years from 1 November 2020, during which time the whole of the State Government’s load will be supplied by the Aurora solar thermal plant at Port Augusta