Silex Systems has discontinued its plans to build its 100MW Power Station Project after some serious deliberation regarding the RET.
This move naturally affects the Australian Renewable Energy Agency’s $75 million conditional funding for the concentrated photovoltaic power plant.
This decision of Silex Solar to discontinue the project was based on several factors. One consideration is the uncertainty surrounding the Renewable Energy Target (RET). Another factor that influenced the decision is the low wholesale electricity prices.
As a result of this drastic action of Silex Solar, the funding from the Victorian Government in the amount of $35 million will also be discontinued. The common agreement between the two parties made this move of the government possible.
Silex Solar, a subsidiary of Silex Systems stated that it is currently exploring other alternatives to continue the development of the Mildura site but on a smaller scale.
Company representatives of Silex Solar are also in discussions with the Victorian Government as well as ARENA about possible funding for its CPV (concentrated photovoltaic) ‘Dense Array’ dish technology and various possible Australian-based projects.
“There’s a number of factors, including low wholesale electricity prices and the uncertainty surrounding the Renewable Energy Target,” said Michael Goldsworthy, Silex System CEO. “They’re the two main factors,” he added.
A speculation is going around Canberra that the Prime Minister has asked for the Government review of the RET to include not just a downgrade of the target, but to completely abolish it.
Potential of Silex Solar Project
If the Silex Solar project is completed, the CPV Mildura project could produce electricity for 40,000 households. However, after years of groundwork, the project was finally shelved. Goldsworthy said that the renewable energy target presented an attractive price for renewable energy, but this advantage was adversely affected by the uncertainty with regards to the future of the policy.
The RET dictates that by 2020, 20% of all electricity must come from renewable sources. “There’s not much pressure on the market to have renewable energy in their portfolio now simply because the RET is at least going to be wound back and possibly abolished,” lamented Goldsworthy.
“…the problem we face in the 21st century in Australia is the transformation of the energy sector, and our concern with the RET, as it’s currently set now, is that it simply doesn’t work – that we’re not seeing investment in renewables behind it,” said Matthew Warren, chief executive of the Energy Supply Association. He represents electricity companies in Australia.
“We’ve seen substantial changes in the conditions that the RET is operating in – falling demand, a removal of the carbon price – and that just means that we don’t see investment falling in behind the RET,” he added.
This recent dumping of the Silex Solar Mildura Project in Victoria, after all the preparatory work and activities that were expended and all the money that were spent, perfectly sums up the renewable energy situation in the country.
It seems Australia is willing to take the risk of being left behind from the rest of the world in adapting and utilizing clean energy.