Indian tycoon pulls plug on $1.5b Pilbara solar project9th March...

Indian tycoon pulls plug on $1.5b Pilbara solar project

9th March 2009, 6:00 WST
Indian fertiliser tycoon Pankaj Oswal has axed plans for a $1.5 billion solar energy plant in the sun-drenched Pilbara and instead moved the ambitious project to South Australia.

It is understood Perth-based Mr Oswal’s struggle to secure a 1300-hectare parcel of land in the Pilbara was the deciding factor that led him to instead enter into talks with the Coorong District Council, about 100km south-east of Adelaide.

The Pilbara’s loss could be Coorong’s gain, with Mr Oswal’s ambitious plan to build one of Australia’s biggest solar power plants likely to create much-needed jobs for the drought-affected district. Mr Oswal is in talks with South Australian electricity buyers to establish at what price he could sell his solar-generated electricity, which traditionally costs about four times as much to produce as gas-fired power.

Despite the big capital cost (Mr Oswal has said he would draw on family money and debt), high operating costs and long pay-back period, solar power is expected to become increasingly attractive in response to the Rudd Government’s drive to introduce an emissions trading scheme and reduce Australia’s greenhouse gas footprint. The ETS is likely to make coal or gas-fired electricity more expensive, in the process cutting the cost advantage over solar power.

Coorong chief executive Tim Drew confirmed yesterday that Mr Oswal had approached the council with his solar project and that “we are favourably inclined towards it”.

He said the council expected to settle on the acquisition of a 809ha parcel of land, understood to be in the Tailem Bend area, this month.

Mr Drew said the parcel of land enjoyed 280 days of sunshine a year and was reasonably flat — two core requirements for a solar power plant.

He would not reveal other specifics about the land nor its intended use, saying the council was considering expressions of interest from a range of parties proposing mainly agribusiness ventures.

It remains unclear whether the scope of Mr Oswal’s original $1.5 billion Pilbara solar plant, capable of producing 100 megawatts of electricity, has been changed for Coorong.

Coorong, covering 8836sqkm of mostly farming land, has been badly affected by drought which has decimated its dairy industry.

The district is connected to South Australia’s main electricity grid, which should negate the infrastructure access problems that have dogged Mr Oswal’s original Pilbara pursuit.

Mr Oswal had targeted the Pilbara, home to his flagship Burrup Fertiliser operation, as best-placed for his solar project given the region’s sun exposure. He had also signed a support agreement with Horizon Energy, the WA Government-owned utility that provides electricity to regions including the Pilbara and the Kimberley.

But he lost patience after failing to secure a suitable parcel of land close to existing power infrastructure but also far away enough from the coast to be sheltered from cyclones.

PETER KLINGER

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