The news has shocked environmental and community groups and ignited a political battle over who is to blame.
The energy project had broad state political and Port Augusta community support, and promised more than 600 construction jobs for locals.
Energy Minister Dan van Holst Pellekaan announced the failure this morning, telling reporters that the tender to supply the State Government with energy, which SolarReserve’s Port Augusta molten salt solar thermal plant project won in 2017, will now be reopened.
He said the Liberal Party had done everything it could, both in Opposition and in Government, to support the project – located in his own electorate – but that SolarReserve was not able to deliver “its part of the bargain”.
He added that SolarReserve was searching for a third party to potentially buy the project and, if that occurred, the new company would be “very welcome” to bid in the tender to supply the State Govenrnment’s energy needs.
But Labor has blamed the failure on the Marshall Government policy to build an electricity inter-connector to New South Wales, arguing that it undermined South Australian investment in renewable technology by importing “dirty” coal-fired power from interstate.
Repower Port Augusta campaigner Dan Spencer said it was devastating news for Port Augusta and for the state.
He said it could mean the project is “terminal”.
“This is an extremely disappointing decision,” he told reporters this morning.
“The local Port Augusta community and all South Australians are asking a lot of questions.
“We need to know when did the state and federal government know that this promised solar thermal project was in trouble.”
Spencer argued the project was “too big to fail” and called on both levels of government to double down on their support to get the project of the ground.
“This is a project that’s too big to fail for the local community, who are relying on the 650 construction jobs and 50 ongoing jobs this would create after the former power station closed,” said Spencer.
“It’s also too big to fail for a federal government that promised money, they did a deal with Nick Xenophon to secure passage of economic legislation with their promise of funding – so what happened to that money?”
The federal Coalition Government in 2017 agreed to give $110 million in concessional finance to underwrite the proposed solar thermal plant as part of a deal with then-Senator for South Australia Nick Xenophon, in return for his vote to pass tax cuts though the Upper House.
Opposition Leader Peter Malinauskas argued the Marshall Government was responsible for the project’s failure.
“The State Government knew that the construction of an inter-connector would result in NSW brown coal power coming down the line and displacing investment in solar thermal generation,” he said.
“Steven Marshall and Dan van Holst Pellekaan have decided to actively and aggressively pursue the construction of an inter-connector in South Australia … and the consequences of that are now starting to play out.”
Malinauskas said the Labor Party had received independent advice from the bureaucracy while in Government that an inter-connector would displace investment away from South Australia.
Asked, however, whether SolarReserve had ever itself warned that the inter-connector would undermine the solar thermal plant, Malinauskas said the company itself “had an interest in the commercial viability of an interconnector (and so) you’re better off taking the advice of the experts who are providing advice to Government, independent of any particular company”.
“They made it clear to us that the building of an inter-connector would result in displacement of South Australia’s own generation.”
But van Holst Pellekaan completely rejected the notion the inter-connector had anything to do with the company’s failure to achieve financial close.
Greens SA Senator Sarah Hanson-Young said she has written to Premier Steven Marshall and Prime Minister Scott Morrison, urging them to entirely publicly fund the solar thermal project.
“South Australians would be proud to be the owners of the country’s first baseload solar thermal plant,” she said.
“A publicly-owned solar thermal plant would be a boon for jobs at a time when they are desperately needed in our state.
“It would also provide investment in R&D catapulting South Australia as an innovation state.”
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