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The Impact of the Solar Boom on the Australia Electricity Sector

Bob Gorman's picture
Writer Freelance
  • Member since 2016
  • 2 items added with 53,028 views
  • Mar 22, 2018

Right now, Australia is undergoing a solar renaissance. Industry leaders say that the solar energy capacity could double this year. While part of this increase is due to large solar farms, there was also a record-breaking number of rooftop installations in January.

Australia’s Solar Power Boom

In January, the country had its best January ever for rooftop installations. During this month, the country gained an additional 111 megawatts of power from the installations. Compared to the previous year, Australia had a 69 percent increase in installations.

The installations are driven by more than just a concern for the environment. Only 38.2 percent of Australians said that they would invest in solar panels to help the environment. The remaining 60.5 percent of survey respondents said that they wanted solar panels to reduce their power bill.

In addition to record-breaking rooftop installations, Australia is about to have 30 more solar farms. In just Queensland, there are an additional 18 industrial projects under construction. In 2017, New South Wales had double the number of solar farms approved as it did in 2016. New South Wales approved 10 solar farms last year. Part of this increase is due to how easy these large-scale projects are to create. These industrial farms can be constructed in just a few weeks. Many of the approved projects will be operational by 2019.

The large-scale projects could increase solar energy production by 2.5 to 3.5 gigawatts (GW) of power. Rooftop solar installations could add a total of 1.3 GW of power to the electrical grid in Australia. Currently, Australia has a solar capacity of 7 GW. Altogether, these projects could eventually double the country’s capacity for solar power.

In Queensland, solar panels on residential homes are the largest source of power. The added 10 solar farms in New South Wales will be reducing carbon emissions by an impressive 2.5 million metric tons. This is the equivalent to removing 800,000 cars from the roadways.

Part of the drive toward residential solar panels is due to the low installation costs. Residents who want to lower their electricity bill no longer have to spend a significant amount of money to set up solar power. In Queensland, almost a third of residential properties already have solar panels installed. This is the highest rate of installations in the entire country. Once all of the large-scale farms are created, about 17 percent of the state’s energy will be from solar panels.

The latest plant in New South Wales is in the Riverina. The Finley plant will have 170 megawatts (MW) of solar power. In Queensland, the Munna Creek solar farm will produce 120 MW. In addition to being a greener power source, solar energy can lower the country’s electricity bills. Out of every type of electricity generation type, solar is the cheapest way to create energy. When the cost of the solar panels is divided over 20 years, the average cost per kilowatt hour is just 25 percent of grid pricing.

Why Australians Are Turning to Solar Power

Australians cite cost savings as the biggest reason for installing solar panels. Across the country, residents in Queensland and South Australia were found to be the most likely to install solar panels as a way to save money. Meanwhile, Victorian residents were more likely to cite the environment as their motivating factor. Younger respondents were also more likely to cite the environment as the main reason for installing solar panels. Meanwhile, individuals over the age of 55 were the most likely to cite the cost savings as the biggest reason for using solar power.

Overall, the country added 1.25 GW of solar power in 2017. This was a record-setting year and shows a continued boom in the solar industry. In the next year, the trend is only expected to continue. Rooftop panels alone are forecasted to add 1.3 GW to the nation’s power grid this year.

Photo Credit: Martin Abegglen via Flickr

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Nathan Wilson's picture
Nathan Wilson on Mar 26, 2018

According to WNA, Australia’s average electricity generation is 29.5 GWatts. That means that 7 GW of PV will only deliver about 7% of annual electricity (assuming 30% capacity factor); not great.

Given the nearby desert, Australia should be on a clear track to have solar replace coal as the dominant source of electricity. But I see no evidence of that happening.

Like most coastal regions, Australia’s main cities have much worse solar resources than do the in-land deserts. So environmentalists should be demanding construction of large PV farms in these desert areas, along with the required transmission. Remember, seeking better solar resource quality is not primarily about cost, it’s about reducing the need for fossil fuel backup.

I’ve also read that Australia has some locations that would be good for pumped hydro installations. These should be developed, in-spite of the implied need for transmission, because water is cleaner than any battery industry can be.

And while rooftop PV is great for off-grid locations, pricing systems in which rooftop electricity is cheaper than grid power are inherently flawed and non-scalable. In a solar-rich grid, daytime grid electricity will be nearly free most of the time, and grids can’t be used as free batteries to time-shift other people’s electricity. In such a grid, electricity users must pay a fair amount for grid access and sunny-day electricity will be cheap, but the cost will start to climb on cloudy days and nights (that’s how the transmission and storage gets paid-for). This demand smart grids with real-time pricing. The days of simple net-metering are over, if we want clean energy.

With only 7% of electricity coming from solar, Australia has not needed to be a leader in any of the issues that matter for reaching high penetration. It’s time for that to change.

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