Australia’s Reverse Auction – the ACT renewable energy procurement programme

The ACT government has a target to meet 90% of its electricity requirements from renewable energy sources by 2020. As a means of achieving this target, the state has initiated a reverse auction system. This has captured my attention as it has a number of similarities with South Africa’s REIPPP Programme, and it involves moving away from a certification scheme towards a PPA arrangement.

Given that a number of people that I have spoken to have indicated that the RET large scale system does not provide any guarantee on the sale of electricity, and that investor confidence is a bit shakier than would be ideal (linked to federal government’s anti-renewable sentiment at the moment), the ACT’s programme seems to provide a stable and predictable procurement methodology for large scale renewables projects.

Below is a very brief overview of what has been procured to date, and the types of requests for proposals or expressions of interest have been issued.

Solar Reverse Auction:

The first round of procurement by the ACT government was for 40MW of solar generation potential. Issued in January 2012, this RFP has resulted in the selection of three solar projects, namely:

• Royalla Solar Farm Pty Ltd (20MW)
• Zhenfa Canberra Solar Farm One Pty Ltd (13MW)
• OneSun Capital 10MW Operating Pty Ltd (7MW)

Royalla has been completed and was officially opened in September 2014. Zhenfa and OneSun are still to be constructed, and both have experienced planning delays.

More info on this can be found here.

Wind Reverse Auction

In 2014, a reverse auction for 200MW of wind was announced. Wind projects not exceeding 100MW could bid under this auction.

The programme had four key objectives, focusing on:

• Local content/local economic development opportunities
• Educational initiatives
• Research & development initiatives
• Global impact (i.e. the extent to which the project would influence the ACT being a centre of excellence or an export hub to the rest of the world)

Projects were assessed according to

• local economic development contribution
• price
• community engagement processes
• the extent to which the project developer or debt provider required guarantees on the sale of electricity at the listed feed in tariff

If projects were located outside of the ACT capital region, they needed to be within the top 20% of projects on price in order to be considered. If they met this threshold, they could be assessed according to the abovementioned criteria.

The three preferred bidders resulting from this programme were:

• “Ararat Wind Farm Pty Ltd for a 80.5 MW proposal to be located north-west of Ballarat, Victoria. The project is being developed by RES Australia Pty Ltd, a subsidiary of RES UK, a global renewable energy company.
• Coonooer Bridge Wind Farm Pty Ltd for a 19.4 MW proposal to be located north-west of Bendigo, Victoria. The project is being developed by Windlab Ltd, a Canberra based renewable energy company.
• Hornsdale Wind Farm Pty Ltd for a 100 MW proposal to be located south-east of Port Augusta, South Australia. The project is being developed by Neoen, a French based renewable energy company.__” [Source]

All three of these are therefore outside of the ACT capital region.

Some of the initiatives supported by this programme include the establishment of a masters programme in wind at the Australian National University and a wind training course at the Canberra Institute of Technology.

Next Generation Solar Auction

A request for expressions of interest has recently been issued for up to 50MW of solar technologies which incorporate some form of storage. “Energy storage can be in many forms including chemical (e.g. batteries), thermal (e.g. molten salts) or potential energy (e.g. pump and store hydro).” [Source]

Submissions are due on the 8^th July.

Thank you to Dr Nathan Steggel from Windlab, Leah Howell and Guy Raithby-Veall from Arup and Wendy Moloney from Aecom for their time and input on this topic.