This report presents the key insights and trends that project proponents learnt from reaching financial close, construction, grid connection, and ramping up to full generation.
Report extract
In 2016 the Australian Renewable Energy Agency (ARENA) ran a $100 million competitive grant funding round with the aim of driving down the cost of delivering large-scale solar photovoltaic (PV) projects in Australia. Under the Large-Scale Solar (LSS) Funding Round, ARENA funded 12 projects. Two additional projects that did not receive funding signed up to ARENA’s knowledge sharing obligations. This brought the portfolio to 14 projects totalling 603 MW (the LSS Round Projects).
The Clean Energy Finance Corporation (CEFC) offered a long-term debt product alongside ARENA’s grant funding to 10 of the LSS projects. This was to provide finance certainty irrespective of whether projects had a guaranteed revenue stream from a power purchase agreement (PPA) prior to ARENA grant allocation and financial close.
Following the LSS Round, in 2017 and 2018, the CEFC provided finance to eight projects that did not require ARENA grant funding (the Post-LSS Round Projects).
ARENA’s LSS Funding Round played an important role in the development of the large-scale solar industry in Australia by helping to drive down the cost of large-scale solar development, construction and finance. The round also attracted international engineering, procurement and construction (EPC) providers to Australia, which further improved the cost competitiveness of the local EPCs. Today, the building, owning and operation of large-scale solar farms in Australia no longer requires grant funding.
The project proponents were obliged to share knowledge, insights and data from their funded projects. This information and interviews with key personnel from the LSS Round Projects was aggregated, anonymised1 and then analysed by ARENA with the assistance of technical advisory firm, Ekistica.
This report presents the key insights and trends that project proponents learnt from reaching financial close, construction, grid connection, and ramping up to full generation. The trends are illustrated in a series of charts, where the CEFC has also provided commentary on the experience of the Post-LSS Round Projects.
The LSS Round Projects have overcome many challenges to reach first generation. Information and knowledge collected from the projects provides crucial insights for the energy industry and regulators about the nature of renewable projects amid the energy transition.
We also acknowledge the significant role other projects have played, particularly those built prior to the LSS Funding Round. They helped develop the industry by achieving their intended outcomes, with those projects helping to establish a “blueprint” for those that followed.
The findings can help developers, investors and electricity grid authorities to better understand the Australian large-scale solar market and the potential risks of and mitigants for investments in this space.
