With only two months until the Copenhagen Conference, the closure of Australia’s only large-scale solar energy station is not only detrimental to the renewables industry but serves to highlight the government’s course on carbon reduction. Rebecca Zhou investigates.

Only a month ago, research engineer David Turner was assisting the development of the world’s largest solar station. The company he worked for has now been padlocked and he and 100 of his 150 colleagues were told to go home after its biggest private investor TRUenergy withdrew its $285 million agreement.

The Melbourne-based company Solar Systems was in the process of building a 154 Megawatt solar photovoltaic station in Mildura that would have created 1000 new jobs and been able to power more homes per unit than any other station in the world. Along with the 150 engineers and researchers
the company directly employed, myriad suppliers that had been providing components like mirrors, solar cells, dish structures and cables have been affected.

David Turner speaks to a crowd of 400 people in front of the Solar Systems factory at the October 11th rally. Image: Chris Breen

Over the last 15 years private investors have been sustaining the company’s 5 smaller projects in remote parts of the Northern Territory but during negotiation with Lehman Brothers for the Mildura project last year, an episode called the Global Financial Crisis severely undermined the company’s future. Over the last 11 months, it has been hunting for capital around the world to no avail. The withdrawal of its major investor TRUenergy on September 7th was the last straw.

“The financial crisis is only part of the problem,” said Turner, “The other is that investors believe the company guarantees no immediate revenue. But we had actually been looking for ways to commercialise large-scale stations and level the cost of production with that of fossil fuels,” Turner said.  

“We were about 90% of the way there. Stations might have cost 250 thousand six or seven years ago now only costs about 100 thousand.”

Because photovoltaic technology is expensive but steel and glass are cheap, the company worked out a way of concentrating the sunlight on a small PV panel which would make the overall cost per unit cheaper. The technology’s ability to track the sun and operate at lower temperatures render it capable of taking current rooftop solar panel efficiency levels up from 10% to 30%.

“It’s an incredible waste,” said Chris Breen, coordinator of the Save Solar Systems’s campaign who led a protest rally of over 400 people in front of the SolarSystems factory in Abbotsford, Victoria on October 11^th. “The reality is that if they don’t do it no one else can right now.”

With two months until the Copenhagen conference and an Emissions Trading Scheme underway, this episode underscores the reality of industry and government positions on fighting climate change.

“We don’t have a long term government framework policy in place on renewables. This makes it very hard for investors to have the confidence to place money in any of our renewable projects.” said Turner.

Germany pioneered the Feed-in Tariff (FIT) model in 2004. Under this model the government guarantees anyone who generates electricity from solar PV, wind or hydro gets a payment four times the market price, which is currently 35p pence a unit- for 20 years.

“People say only 3 or 4 percent of energy comes out of renewables so the feed-in tariff is useless. The whole point of it in Germany was never to make their country go renewable overnight; it had a two fold purpose and that is to build capacity and capability.” said Turner. 

The rally attracted a counter-demonstration of 150 locals with signs saying 'Fuck off Greenies- Burn more coal!' Image: Chris Breen

Despite Australia’s natural solar strengths, foreign investors have been rejecting proposals from both state and federal governments in favour of much cloudier countries. In January this year, Norwegian solar cell manufacturer UMOE was considering building its poly-silicon plant in Australia but in the end opted for Canada. Its renewables chief, Oystein Oyehaug, said: “In the 10 to 15 countries we visited we got substantially better packages than from Australia, whether it was tax or investment incentives or bank underwriting.”

“[Federal Minister for Energy] Martin Ferguson has pretty much said feeding tariffs will never happen when he’s in parliament. You only have to look at his background to see where his loyalties lie. When you’ve Garnaut saying whole thing isn’t going to work you really have to wonder where this leadership lies in the scheme of reducing emissions,” said Turner.

In September this year, Solar Systems’s biggest investor, mining and energy company TRUenergy withdrew its $285 million agreement as a result of its Hong Kong-based parent company China Light and Power’s decision to write off its entire $HK346m ($53m) due to its failure to attract a another partner. The Australian government itself had pledged 128 million from funds such as the Low Emissions Technology Demonstration but only half a million has so far seen the light of day.

“Ferguson says we haven’t achieved milestones required for funding. The first milestone for half a million dollars was a 140 kilowatt demonstration and that was planned for October last year and we met that on time. The second milestone is to build a 5 megawatt station by 2010 for which we’ll receive another 50 million.” said Turner.

Paddy Gibson, an activist for the action group Solidarity believes that this is a reflection of the government’s overdependence on the free market. He believes that they should stop merely providing incentives for businesses to invest in the renewables industry but rather take control of it themselves. 

 “The technology is sitting there waiting for someone to invest in it. The government just needs to step in and say we’re going to build these factories, we’ll nationalize it and we’ll build 20 more instead of closing down the one that exists,” Gibson said.

“You only need to look at the history of large scale infrastructure in Australia to see how critical public sector support is to its construction. The government needs to take the same responsibility for renewable energy as it did for electricity grids and railroads.”

Turner doesn’t believe that the government needs to nationalise the industry but simply implementing loan guarantees and feed-in tariffs will be enough to attract investors and expand the industry. 

“Victoria’s desalination plant is a prime example of critical infrastructure that would not be viable without Government acting as a guarantor to the project.” he said.

The closure of Solar Systems casts serious doubt over Rudd’s Solar Flagship Program that is designed to support and fund two solar thermal and two photovoltaic stations in Australia.

“If Solar Systems, the world leader in CPV technology cannot commercialise their technology in their own backyard in the current economic and regulatory climate, then there seems little hope that the Solar Flagships Program will succeed,” said Turner.

Turner and the other employees have little faith in the future of their company and the intellectual property that taken them decades to develop.

“There’s probably less than a 30% chance of PWC being able to find a buyer. Most likely the IP someone will just buy the IP and develop it overseas. The company will then go into liquidation and cease to exist completely.”

But he and supporters of the campaigns aren’t throwing in the towel just yet. Turner has been meeting with local MPs and speaking to representatives of Victorian Energy Minister Peter Batchelor’s office to discuss solutions and the Save SolarSystems campaign has planned another rally on the steps of Parliament House in late October, the day which the PWC administration day is to end.