E & OE
Subjects: Solar Flagships, National Radioactive Waste Management Bill
KIRK: Firstly on the Solar Flagships program why is the Government having so much trouble, or why are the solar companies that are in the race, having so much trouble selling power do you think?
FERGUSON: Well it’s not just the question of an offtake agreement in terms of a power purchase agreement. These are complex technical and commercial projects. At the time of the announcement they were potentially the world’s biggest solar PV and biggest thermal solar projects. The proponents are required to meet appropriate deadlines. In terms of the solar thermal there was only one project selected by the reference group. I’ve extended that deadline to the 30th of June to enable them to get their house in order.
KIRK: So what’s the big problem?
FERGUSON: Well some of those issues are of a commercial in confidence nature and I’m not at liberty to actually go into the detail but the Solar Flagships Advisory Council will be considering those issues in detail. I’m simply going out of my way to make sure we do everything possible as a nation to get major investment in solar R&D [research and development] up in Australia. And people have got to understand these are not projects you can pick up off the shelf and put in place. They are complex from an engineering perspective, a commercial perspective and getting in place the power purchase agreements.
KIRK: But the Greens say that a number of companies that applied and got short-listed did in fact manage to strike deals to sell their power but that they got vetted out. So clearly selling solar power doesn’t appear to be an insurmountable barrier?
FERGUSON: There are a range of applicants of good standing for the solar PV project selection. On solar thermal there was only one we considered appropriate. In terms of those alternative companies, can I say, a pre-condition for selection was not having in place the power purchase agreement. There were a range of issues that had to be attended to in putting forward an application for consideration by the reference group.
KIRK: But that is what you have cited as the major problem.
FERGUSON: There are a range of issues, one of which is the power purchase agreement.
KIRK: What are the other problems?
FERGUSON: As I have indicated I am not in a position to actually go into these issues in detail, some of them are commercial in nature, and they have been handled at arm’s length to me. On the basis of the material put in front of me I have determined it is appropriate that we can still meet the deadlines of having these solar projects in place by the end of 2015, whilst enabling us on the solar PV project to enable Moree to further argue the material changes to the project on the basis on which they were originally selected. Whilst also giving those other three companies, or consortiums, the opportunity to revisit their projects and to be appropriately consider them again by the solar technical reference group.
KIRK: Why did the solar projects that had power purchase agreements ready to go, not make the grade?
FERGUSON: A power purchase agreement was not a condition of project selection. It was an issue that required them to advise the selection committee of how they would go about putting in place a power purchase agreement. There were a range of other factors from an engineering capacity, a requirement to actually put 150 megawatts into the system in terms of solar PV. And I simply reiterate, the Government’s determination to actually get this right remains. But we are very cautious from a taxpayer point of view to make sure that the projects stack up commercially and have the capacity to actually prove that on grid solar activities are possible in Australia. Because the last thing we need is for these projects to fall over, because that will undermine the community’s confidence in the Government’s commitment and willingness to spend taxpayers’ dollars on these key projects.
KIRK: The Greens say that your Solar Flagships program is flawed and is set up to fail so that you can say that you have tried to support solar energy but that it doesn’t stack up, end of story.
FERGUSON: The Greens’ statements are of a dishonest nature. Project selection and the determination of the guidelines followed detailed consultation with the solar industry conducted at arm’s length to the Government and me as the Minister.
KIRK: In the end will all this be made public once the process is finished?
FERGUSON: Well we will announce the outcome of the process and I am quietly confident, all being well, we will get up the Solar Dawn project, which is the solar thermal project at Chinchilla in Queensland and I think I have best positioned a solar PV project on grid - at the time of the announcement the biggest in the world - to actually come into commercial operation in Australia and that is the objective. All the way through this clean energy technology challenge there is going to be starts and finishes aimed at actually getting this right. This is taxpayers’ money.
KIRK: You have repeatedly said that solar power isn’t up to providing baseload power. It’s not going to be a self-fulfilling prophecy?
FERGUSON: It is not off the shelf at the moment. And our job is to work with a range of consortiums to facilitate research and development and innovation in Australia to prove the capacity for on grid solar activities. This is not as simple as doing something on your house or on the top of a retailer or warehouse outlet. This is a major potential solar farm, very challenging from an engineering perspective, and getting in place a range of commercial requirements including a commercial power purchase agreement, which is proving a little bit difficult at this point in time.
KIRK: The Solar Flagships program was announced in the May Budget of 2009 and it has been plagued by delays. By the time that you release funding, if that’s what happens – there is no guarantee that it will be – it will be three years down the track. By anyone’s measure that is not a success story is it?
FERGUSON: Announced in May 2009, public consultations including over 100 solar operators had the opportunity to express their view as to the appropriateness of the guidelines, then we called for applications in December 2009 and in May/June we actually announced last year the successful project proponents. As I have indicated we are very cautious, we are risk averse, because we are not going to allow this solar activity with the Government from an innovation perspective to fail. I wish you could buy them off the shelf and put them in place. You just can’t. And the taxpayers are not going to have their dollars wasted; they want us to prove that you can actually do this on grid. You can do it on a home, you can do it on the top of a warehouse, this is far more significant than those activities to date.
KIRK: Do you want solar power to succeed?
FERGUSON: I want, to be frank with you, any form of clean energy to succeed. And that is why the Government is not just supporting solar, we are supporting a range of clean energy technology other than nuclear. We are trying to actually prove up geothermal, see if we can succeed on ocean power, investigate whether or not CCS – carbon capture and storage – can be made commercially viable. I personally am not seeking to pick a winner. I have got a very open mind, my objective is to put in place the cheapest form of baseload, reliable, clean energy possible for Australia.
KIRK: And just finally the Opposition is proposing to amend your bill on radioactive waste disposal, offering a $10 million fund to a state that agrees to a radioactive waste dump. Will you support that amendment and therefore will that guarantee that your bill will proceed?
FERGUSON: There are two amendments that have been agreed between the Government and the Coalition with respect to the radioactive waste disposal bill. A process a might say we started as a community in 1988. It is time that we brought this to a conclusion in the foreseeable future. There is a proposal for a fund going, if I remember correctly, to support for research activities, health and education, delivery of basic requirements to the community for the state or territory that agrees that it is appropriate for us as a nation to store our waste in accordance with international requirements in a safe and proper way.
KIRK: So you will support the Coalition amendments?
FERGUSON: There is an agreement between the Coalition and the Government as to our responsibilities to store our waste in a proper way that is accountable to the community and that agreement includes two amendments going to a technical issue from the Government’s perspective and a request of the Coalition to support a fund of $10 million.
KIRK: Martin Ferguson, thank you.
FERGUSON: Thank you.