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Utility-Scale Solar

Utility-scale solar is well on its way to becoming common place in many parts of the world. Germany, the historical solar powerhouse, is no longer the leading developer of utility-scale photovoltaics (PV), with 2.95 GW, being trumped by the USA, with 3 GW, and China, with 3.8 GW. And, as mentioned in another GSES article, India is aiming for 20 GW by 2022, and this is expected to be dominated by utility-scale solar. By contrast, the vast majority of Australia’s total 3 GW PV is in rooftop installations, with only 10 MW being in large-scale systems. However, this is starting to change, with AGL Energy planning to start construction on their 102 MW and 53 MW PV plants at Nyngan and Broken Hill, respectively.


A combination of improvements and falling costs in solar PV technology is continuing to drive the price of solar down such that it is edging closer to becoming competitive with wind generation. By deploying solar PV in large centralised plants, economies of scale can be exploited, further driving down costs. As an example, in 2012 the US National Renewable Energy Laboratory estimated the average installation cost in the USA for a residential PV system was $3.69/W. For a utility-scale ground-mounted system, this cost drops to $2.50/W.

Local communities stand to benefit greatly from the deployment of utility-scale solar through the creation of jobs both during construction and for ongoing operations and maintenance. Given the amount of land and solar resource required, in Australia many of these plants will be constructed in regional areas, providing an important source of employment and income to the local communities. AGL Energy is currently in the process of developing two large-scale plants at Nyngan and Broken Hill in NSW, creating 300 and 150 jobs, respectively. During construction, AGL also estimates that tens of millions of dollars will be spent on local industries and businesses.

The solar resource in Australia is unmatched around the world. Australia has large areas of unused regional land and high levels of solar radiation. For example, Sydney has a yearly average daily radiation of 4.6 PSH, whereas Frankfurt, Germany, has an average of only 2.7 PSH. Solar is Australia’s most abundant resource and assuming further cost reductions will one day be the dominant energy source.

Since the creation of the Renewable Energy Target scheme and the creation of Small Technology Certificates (Renewable Energy Certificates), the Australian PV industry has grown into maturity. Australia has recognised the value of compliance and has responded with updated standards, guidelines and inspection schemes. Current standards, such as AS/NZS 5033 and AS/NZS 4777, are becoming more clearly defined as experience within the industry continues to shape their requirements.


The major drawback of utility-scale solar is the same as for any centralised generator: the energy requires costly transmission to transport it to where it will be consumed. The dramatic reduction in cost of PV technology over the past decade has meant that the cost of energy from a rooftop system is now competitive with retail pricing. With these systems, electricity is generated at the source of consumption, therefore negating the need for expensive transmission and distribution costs. For a customer to buy electricity from utility-scale solar, they must also pay these costs.

Unfortunately, the reductions in cost achieved by economics of scale are not great enough to compensate for the transmission and distribution costs and make the price compared to that of distributed PV. Successful deployment of utility solar in other regions of the world has been with the assistance of government subsidies. This is also the case for the newly approved AGL utility plants, which are receiving support from ARENA and the NSW Government. Stable government support is essential to the industry to provide certainty to investors. The only way to achieve further cost reductions is to continue to provide additional support to these kinds of projects.

There are several grid penetration issues to be considered with the deployment of utility-scale PV. Primarily, grid stability must be taken into account; a large PV array has the potential to have a widely fluctuating output, depending on solar irradiance and cloud cover. It is important that developers work closely with network providers to ensure the stability of the grid is maintained.

As coal- and gas-powered electricity generation continue to produce greenhouse gas emissions, the country needs innovative solutions and quick reforms in its electricity industry. Large-scale PV plants, if successful, would not only support Australia’s renewable energy industry but also help to establish Australia’s future as a world leader in green technology. However, large-scale systems form just a part of the solution, with grid-connected distributed PV, distributed battery storage and other large-scale renewable energy technologies forming the other components. Emphasis must be placed on all parts in order to pave the way for Australia’s future energy grid.

We welcome your comments and opinions! Please feel free to write to us at, with ‘GSES November newsletter: Utility-Scale Solar’ as the subject.

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