The breadth and depth of detail in the the Generator Statistical Digest 2019 (GSD2019) (to be released today) reveals any number of important insights into the supply side of the National Electricity Market. One theme that stood out for me as I reviewed the data was the set of challenges facing the NEM’s most recent crop of new entrant generators – utility-scale solar farms – as they come to grips with the messy reality of the electricity market. A couple of years ago it might have seemed like converting plots of old-style farmland into new-style solar farms would be a licence for someone to print money.
NEM wholesale prices were averaging close to $100/MWh, the market value of Large-scale Generation Certificates (LGCs) under the Federal Renewable Energy Target scheme was around $80-90 (at one certificate per MWh), and the costs of building large scale solar had fallen dramatically, with some projects then reportedly being economic at all-up revenues in the $60-80/MWh range. With potential wholesale revenues of more than double that level, and relatively short lead times for construction, it was no great surprise to see a rush of utility-scale solar projects into the market. Over the last two years almost 3GW of new solar capacity at nearly forty projects has commenced production, with more still in the build or commissioning phase. It’s instructive to look at the GSD data for many of these recent new entrants, which reveals that – like agricultural farming – solar farming can face multiple headwinds. A Case Study – Coleambally Solar Farm From the GSD pages I’ve picked out the data for a single DUID, Coleambally Solar Farm in southern NSW, for no other reason than it neatly illustrates a number of these headwinds. I could have chosen any of a few dozen […]