The Australian Renewable Energy Agency (ARENA) has awarded funding of AUD$18.5 million (US$17.3 million) to a hybrid energy project in South Australia.
The project is to be located in the small mining town of Coober Pedy, with an estimated population of fewer than 2,000.
The town currently relies on diesel generation; diesel prices in Australia have risen by 5% a year for the last ten years, and are expected to continue to increase.
However Coober Pedy has high solar and wind resources, the Coober Pedy hybrid project is expected to be capable of powering the whole town for half the year, every year.
The system will integrate 2MW of PV and 3MW of wind with the town’s pre-existing diesel power station of 3.9MW.
The project is intended to improve the security of supply while decreasing diesel use, helping to mitigate climate change.
The project is to be developed by international power provider, Energy Developments Limited, with construction expected to commence this month and completion expected by mid 2017 following the finalisation of investment by Energy Development.
The ARENA funding is part of its programme for emerging renewables.
Energy Developments has a 200-year power purchase agreement with the district council of Coober Pedy, and the project could be used as a model for other energy generation projects in off grid locations in Australia also relying on diesel currently.
“This ambitious project may demonstrate a combined approach for powering off-grid Australian communities that currently rely solely on expensive trucked-in diesel,” said ARENA CEO Ivor Frischknecht.
The switch to integrate renewables is hoped to increase energy independence and security by relying less on the fluctuating diesel costs, and reducing energy transportation costs.
“Australia’s energy demand is growing off the grid and this landmark project will show how high-penetration renewable energy projects can deliver safe, reliable power to off-grid communities” said Frischknecht.
Frischknecht also said the project will include short-term energy storage combined with quick-start diesel engines.
Frischknecht also said Energy Development has “identified a long-term pathway to commercialisation by demonstrating the potential to progressively deploy renewable solutions at off-grid locations as technology costs reduce and fossil fuel costs increase”.
A feature exploring the rise of PBV-diesel hybrids can be found in the latest issue of Solar Business Focus, here.