SEC report highlights Top End’s potential, argues for CEFC-like fund

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For many years the sound of cackling laughter heard emanating from North Queensland was thought to be that of Jonathan Thurston, new evidence suggests the noise is actually the result of any number of residents giddy with excitement for the region’s renewable future. 

The Smart Energy Council’s (SEC) Future North report (the Report) by Oliver Yates and Kevin Holmes provides an in-depth look at the great opportunity in North Queensland for a diverse economy and prosperous future based upon renewable energy. “Few places in the world have such underutilisation of natural resources, existing infrastructure resources and people resources,” said the Report, “all within a stable geopolitical environment as exists in this region.”  

Like many regions in Australia with enormous natural resources in renewable energy, such as unrelenting sunshine or battering winds, North Queensland’s remoteness has meant that it is financially disconnected from the country’s main capital centres. This, suggests the Report, makes it “surprisingly difficult for private sector participants to secure the investment interest and capital they need to open up and tap these resources.”  

However, North Queenslanders have been no doubt buoyed by the recent investment in renewable megaprojects in similarly remote regions of the Northern Territory (NT) and Western Australia (WA). The Sun Cable project, now looking to have the backing of Australian billionaire Mike Cannon-Brookes, looks set to build a 10 GW solar farm on a big sunburnt spot of the NT near Tennant Creek. And in the Pilbara, the 11 GW Asian Renewable Energy Hub (AREH) was recently boosted with a significant capital pledge from Macquarie Group

Both megaprojects are seeking to export renewable energy to South East Asia, though the AREH will still most likely depend on a strong domestic presence also. No doubt North Queenslanders have looked to their West and seen the investment opportunities being seized in the NT and WA and want a piece of the action themselves.   

The Report claims to be based on discussions with proponents of a wide range of potential projects in the region. “Near term project opportunities could involve some $15 billion of capital investment and create over 8,000 construction jobs and more than 7,000 enduring and diversified jobs when the facilities are in a steady state of operation.” 

Figures along those lines might seem farfetched to some, but don’t forget that the think-tank Beyond Zero Emissions published a report in which it suggested the NT has the potential for 10 GW of solar PV investment, only to be vindicated mere days later with the announcements of the ambitious plans for the 10 GW Sun Cable project. 

No equivalent plans have yet been unveiled for North Queensland, and indeed one of the region’s biggest pipeline projects, the $150 million 55 MW Cape York Solar Storage project with its 20 MW/80 MWh of battery storage, is now being shopped around by Deloitte after three of Lyon Group’s companies entered liquidation. 

At the same time however, another of the region’s utility-scale solar farms, Haughton Solar Farm, received a boost last week when an innovative network support agreement was made with Kareeya Hydro Power Station to support Haughton’s ability to deliver solar energy to the grid. 

Clearly, the region is highly active and the Report’s authors are confident in the its competitive advantages but argues for the establishment of a Queensland government-owned body called, “for example, the North Queensland Development and Diversification Fund (“DQDDF”)”, to help overcome significant financing challenges. This DQDDF would be organised along the lines of the government’s successful Clean Energy Finance Corporation (CEFC). 

The Top End’s competitive advantages, allied with government assistance, could produce a diversified economy that no longer relied on traditional mining. “The combination of solar with diurnal wind patterns provides very high capacity utilisation factors, reliability and predictability. These resources can unlock strategically competitive electricity prices that, in turn, can power other low-cost industries in the region.” This future or “alternative narrative” as the Report calls it, is well within the region’s compass if it can attract the right investment by following the Report’s suggested structures.