South Australian government puts out tender for long-term, cleaner electricity supply

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The South Australian government has called for proposals for the supply of 100% of its electricity needs. The government has been forced to engage in the search for a new power supplier after the 150 MW Port Augusta concentrated solar power project ground to a halt earlier this year.

The Aurora project was expected to cover all of the government’s power needs, under a 20-year generation project agreement inked in 2017. At the time, SolarReserve’s bid of $78/MWh was unexpectedly low for CSP. However, in April, the U.S. developer abandoned the project and proposed it should be sold to a third party.

The state government said it would immediately begin the process of returning to the market to secure its future electricity needs, noting that any party that might purchase the project from SolarReserve will be able to tender for the new contract.

“The Marshall Government’s priority is a contract that delivers lower cost electricity whilst improving competition in the South Australian energy market and reducing pollution,” said Minister for Energy and Mining Dan van Holst Pellekaan said on Thursday. “The State Government’s electricity contract represents an opportunity to deliver more affordable, reliable and cleaner electricity in South Australia whilst securing the successful bidder’s long term future in this state.”

The state government is a significant user of electricity, consuming in aggregate about 500 GWh each year. It currently has a bridging retail electricity contract with Simec Energy Australia for the supply of electricity and retail services for all SA government sites, including hospitals, schools and office buildings, until October 2020, with the provision to extend until 2021 if required.

According to the minister, the government will ensure that it gets the best deal possible for the taxpayers of South Australia. It will also seek to pave the way to improved innovation and competition in wholesale and retail electricity markets in the state.

Available from the SA Government Tenders and Contracts website, the Request for Proposals (RFP) sets out the procurement process and procedure for submitting a response. The RFP allows for proposals for retail contracts, the construction of a new generating plant or combinations that meet the state’s requirements. It represents the first stage of a two-stage procurement process. Following the evaluation of RFP responses, shortlisted respondents will be invited to respond to a selective Request for Tender (RFT) in the first quarter of 2020.

The South Australian government has set out a target of “net” 100% renewables by 2030. The target was set by former Labor SA premier Jay Weatherill during the March 2018 election campaign, with nearly 50% achieved at that stage. Despite the government change, the state has remained on the same course edging closer to the goal. Last year, AEMO projected SA would have 73% renewable power by 2020/21.