The first two stage of a 300MW solar farm – Australia’s biggest – has begun construction near Port Augusta in South Australia after its developers last Friday reached financial close on the project, and agreed to sell it to two of Europe’s biggest investors in renewables, Italy’s Enel Green Energy and the Dutch Infrastructure Fund.
The first two stages, totalling 220MW, of the Bungala project is being built around 12kms from Port Augusta, where the state’s last coal fired generator closed last May. Ironically, project developer Reach Energy is headed by Tony Concannon, the former head of the owners of the Hazelwood brown coal generator in Victoria which closed late last month.
The two first stages of Bungala will be completed late in 2018, and will be built by Spanish company Elecnor, which recently completed the 57MW Moree project in NSW and the smaller 21MW Barcaldine project in Queensland.Bungala will be built “battery storage ready”, and will also likely be the first major solar farm to participate in Australia’s FCAS market (frequency control and ancillary services), using SMA inverter technology to provide voltage control for the grid.
Concannon says the remaining 80MW of capacity could be built – along with battery storage – should the company win a South Australian government tender for 25 per cent of its electricity needs with “dispatchable” renewables.
Reach has submitted proposals for both 20MWh of battery storage and 100MWh, although it did not participate in the other tender for a separate 100MWh battery unit. If the tender is not successful, there are also discussions with other potential off-takers in train.
Concannon’s company, which is looking to develop 1,000MW of solar in Australia, has secured off-take agreements for the output of Bungala 1 and Bungala 2 with Origin Energy, raised $320 million of project finance debt, and found equity buyers for the $450 million project in Enel Green Power and DIM. And all without government grants.
It is one of a number of large scale solar projects proposed for South Australia, but the first to actually begin construction.
“That’s the difference with some of the others,” Concannon told RenewEconomy in a telephone interview on Tuesday. “Some of them have had lots of publicity, but are going nowhere. They don’t even have grid approvals.
“But with us, there are no “ifs” and no “buts”, it is definitely happening. We’ve done that deliberately (to keep a low profile) – Port Augusta has had a number of false dawns.”News of the Bungala project comes as a big wind project, the 212MW Lincoln Gap, located 15kms west of Port Augusta, signed a power purchase agreement with electricity retailer ERM, with construction likely to begin later this year.
On prices, Concannon says that solar is currently “viable” in the mid $70s/MWh, and believes that within a few years, the combination of solar and storage will be “way under” $100/MWh, making it even cheaper than gas-fired generation. (He recently said the combination of solar and storage was already cheaper than gas power).
That, he says, will bring major changes to the grid. “I have no doubt that it (battery storage) will be the future, but I do think there is a lot of other stuff that existing plant can do.”
South Australia is already nearing 50 per cent wind and solar, but Concannon does not see any major threat to grid stability or reliability.The new plant, he says, will be designed to provide FCAS – even at night, after the sun has gone down. “What a number of people don’t realise is that you can design ancillary services for solar plants to operate at night time.
“We can draw in power from the grid at night, and use the inverter technologies to regulate voltage, and that helps stabilise the system, even when the sun is not shining.”
Unlike battery storage in households, which he describes as mostly “passive” and focused on converting the output of solar panels from DC power to AC power so it can be put into the grid, utility-scale inverter technologies are able to shape voltage and current very quickly and in a very flexible manner. Modern wind farms are also using the same technologies.
“The inverter changes phase between the voltage and current … inverters can pull the current in, and change the phase to what grid wants.”
Concannon, a power engineer, says it is a tricky subject to try and explain, but says a lot of the articles he has read in the media – about wind and solar not being able to provide grid services – are wrong.
“Some of the articles I have read in the press are wrong. It is a tricky area, but what you can get with fast-acting inverter technology – they can definitely assist in managing the grid. They can react on frequency, in particular, much faster than gas and coal-fired plants.”
Reach has a 1,000MW solar pipeline, with the remaining project focused around NSW and Victoria. And the former executive of a major fossil fuel focused company is enjoying the focus on solar
Concannon left the “big corporate” world after a family illness and says he “personally felt that large-scale solar was something I could do on a start-up basis.
“The risk allocation was right. I couldn’t say that I had been totally green for the last 25 years, but I did have experience in bringing complex structured deals, and could figure out how to make solar competitive with wind, and how to do it without grants. We are pleased we have done this with no taxpayers’ money,”
Origin Energy chief Frank Calabria also stressed the importance of big solar in Australia, and particularly South Australia, as a counter-balance to wind energy as the shift to renewables accelerates.
“Energy markets around the world are in transition and Australia is no different,” Calabria said in comments on Tuesday. “We must make sure our energy supply is secure, as Australian homes and businesses rely on it. At the same time, we must make sure energy continues to be affordable as we move Australia towards a cleaner supply.”
A measure of Australian business conditions jumped in March to highs not seen since before the global financial crisis with sales, profits and employment all at levels that bode well for a pick up in economic growth in coming months.
National Australia Bank's <NAB.AX> monthly survey of more than 400 firms showed its index of business conditions climbed 6 points to +14 in March, well above the long-run average of +5.
The survey's measure of business confidence, however, dipped a point to +6 which was in line with its long-run average.
The major services sectors and wholesale reported the strongest conditions, while retail continued to suffer. Mining brightened considerably on the back of higher commodity prices.
NAB chief economist, Alan Oster, cautioned that Cyclone Debbie may have flattered the survey by limiting responses from the affected area in northern Queensland.
"Even so, conditions have improved almost across the board to levels that suggest a strong economy in the near-term," said Oster. "That includes Western Australia, which has been looking better of late and suggests the worst of the mining downturn may be behind us."
The economy grew a faster-than-expected 1.1 percent in the fourth quarter of last year, underpinned by strength in consumer and government spending and home building.
That improvement encouraged the Reserve Bank of Australia (RBA) to hold interest rates steady as it kept a wary eye on the risk of overheating housing markets in Sydney and Melbourne.
The NAB survey's measure of sales enjoyed the biggest gain in March, rising 10 points to +22, while profits rose 3 points to +13. The employment index held steady at a relatively firm +5, which implies a healthier labour market than that shown in the official jobs data.
Forward orders also added 2 points to +4, suggesting the acceleration in activity may have legs.
The survey's measure of capacity utilisation edged up to 81.9 percent in March and business speeding intentions rose to a firm +13, pointing to a better investment outlook.
There was still little sign of inflationary pressure in the survey, albeit wage growth was firmer in mining.
Growth in purchase costs and final product prices was tepid while retail prices actually fell 0.1 percent at a quarterly rate, suggesting some downside risks for consumer price inflation in the first quarter.
Shortly after 20-something lawyer, immigrant and entrepreneur Uppma Virdi started her Chai Walli tea business in 2014 she decided to source her ingredients from organic suppliers in India. With that decision made the hard work began: how exactly do you find a credible organic tea supplier in a country like India?
Virdi migrated to Australia with her family when she was one and has visited her home country of India roughly every two years since. But even with that relatively good understanding of the Indian economy and local businesses, trying to find trustworthy suppliers was daunting.
Virdi is one of many business owners who could benefit from the Turnbull government's renewed focus on boosting trade relations with India.
"I had reached a stage where my business was large enough that I no longer needed importers in Australia and I had enough volume to go direct to India, but I did not know which suppliers were credible," she tells The Australian Financial Review.
"I had to spend a lot of time doing my own due diligence, but we should have a contact directory or database of trustworthy representatives in India."
The search for reliable suppliers ultimately led Virdi to fruitful relationships in to Assam in northeastern India and Nilgiri in the south, but only after she travelled there to meet a local contact and did her own research.
"I am in touch with an organic farm activist that I found. I regularly reach out to her as an advisor to help me do my due diligence and check my sources," she says.
Virdi was awarded Business Woman of the Year at last year's India Australia Business and Community Awards. Her teas are stocked in more than 100 fresh produce stores and cafes around Australia and Virdi wants to eventually take the business overseas .
Virdi said the logistical challenges of exporting and importing – and high tariffs – could discourage businesses from trading with India.
"There should be a way for businesses to test the market with small quantities of produce that don't incur a tariff so that you can trial the market and see how it goes without committing. Equally, we should open it up for Indian businesses to trial their products here."
Tariffs in India are quite varied with products such as wheat not incurring any tariff but other goods, such as wine and spirits, incurring high tariffs at upwards of 150 per cent. In 2016 the World Economic Forum calculated the country's average international trade tariff at 11.5 per cent.
Managing director of Mindfields Consulting, Mohit Sharma, moved to Australia in 2001 and has since helped many organisations set up shop in India and helped Indian firms expand to Australia. He has also founded the Australia India Business Council.
Mr Sharma says there are major barriers on both sides hurting trading opportunities, such as lax intellectual property protection laws in India and tough environmental laws in Australia. He is not convinced Indian Prime Minister Narendra Modi's pro-business policies will be effective.
"India needs leadership which can walk the talk and not talk the walk," he said. "They are mostly populist measures. Indian gross domestic product and macro parameters have been adversely impacted and we are yet to see any positive reforms.
India and Australia on Monday signed a Memorandum of Understanding (MoU) on cooperation in combating international terrorism and transnational organised crime — an “overarching security understanding” expected to allow links between law enforcement, border and intelligence agencies of both nations to grow to combat security threats
The agreement was signed after bilateral talks between PM Narendra Modi and visiting Australian PM Malcolm Turnbull Monday
This was one of the six agreements, including one pertaining to “civil aviation security”, which were signed in the presence of the two PMs at Hyderabad House
After the talks, PM Modi said, “Our bilateral mechanisms on counter-terrorism and transnational crimes are functioning well. I am particularly pleased that we have been able to conclude an MoU on security cooperation during this visit.
Turnbull said “strategic and security cooperation” was taking place through regular engagements
The joint statement said, “Recognising that terrorism constitutes one of the most serious threats to peace and stability, the two Prime Ministers reiterated their strong commitment to combating terrorism in all its forms and manifestations, and stressed that there can be no justification for acts of terror on any grounds whatsoever. They asserted that the fight against terrorists, terror organisations and networks should also identify, hold accountable and take strong measures against all those who encourage, support and finance terrorism, provide sanctuary to terrorists and terror groups, and falsely extol their virtues.
To counter radicalisation, the two leaders emphasised the need for urgent measures to counter terrorism and expressed their determination to take concrete steps to step up cooperation among law enforcement, intelligence and security organisations.
Qantas has been named the nation's best airline in the first annual TripAdvisor Travellers' Choice Awards for airlines. On the world stage, the airline's international partner Emirates took out the top spot.
In the first such ranking of its kind for the online ratings service, front-runners were also recognised in Europe, North America, the Middle East, and Africa, and ranked by level of service across first, business, premium economy, and economy classes.
Category winners were determined by an algorithm that canvasses the quality and quantity of airline reviews and ratings submitted by its users all over the world.
Sadly, Qantas failed to rank in the global top 10, but was recognised locally for its high level of service and value for money, while Emirates claimed the best first and economy class titles. Russia's Aeroflot was awarded first place for its business class service, while Air New Zealand nabbed the top spot for premium economy.
The rankings comes shortly after Singapore's Changi Airport was named the world's best for the fifth year running.
Global top 10 airlines
1. Emirates, UAE
2. Singapore Airlines, Singapore
3. Azul, Brazil
4. JetBlue, USA
5. Air New Zealand, New Zealand
6. Korean Air, South Korea
7. Japan Airlines, Japan
8. Thai Smile, Thailand
9. Alaska Airlines, USA
10. Garuda, Indonesia