FEATURE: Future Power Technology – Walcha on the way: massive Australian energy project takes shape

The Walcha Energy Project in Australia plans to combine solar, wind and pumped hydro storage to generate a massive 4GW of energy in New South Wales, Australia. But as one of many such projects planned in a market nearing capacity, what challenges will the development face? Heidi Vella investigates.

Australia is in the midst of a renewable energy boom. Rapid investment in new clean power projects in recent years have led analysts to predict that solar and wind will provide 35% of the country’s electricity needs within two years. This is up from 13% in 2012/2013.

Hoping to accelerate Australia’s green energy revolution further, The Walcha Energy Project promises to provide 4GW of power to the state of New South Wales (NSW) via wind, solar and pumped hydro storage.

The project, which is being developed by MirusWind and Energy Estate, reached a significant milestone in June 2019 when Vestas acquired the first stage of the wind component – the Winterbourne Wind Farm.

Vestas’ involvement is seen as indicator of the project’s viability. However, as Australia’s renewable energy market becomes increasingly overcrowded and managing the grid becomes ever more challenging, the developers will likely face many hurdles in bringing the full project to market.

Congested market

Australia has enough renewable energy potential to power itself 500 times, according to the Australian Climate Council.

While past political wrangling had delayed the exploitation of these clean energy resources, this has changed dramatically in the last several years. Recently, Australia’s Clean Energy Regulator said there is already enough renewable energy capacity built or committed to meet the country’s 2020 Large-scale Renewable Energy Target of 23.5% renewable generation.

Now this capacity and the accompanying subsidy has been accounted for, there is a risk Walcha and other projects may find the market overcrowded and ultimately uneconomic.

“The challenges for these projects include the location and increasingly the business model; for example, is there size or space in the market to build them before they start to overcrowd generation and bring prices down again?” says Leonard Quong, head of Australia research at BloombergNEF.

Additionally, the recent influx of intermittent renewable energy into the grid is causing reliability and management issues, creating technical and logistical challenges in bringing large-scale renewables to market.

In 2016, blackouts in wind power reliant South Australia were blamed on the increasing share of renewables in its energy system. The Australian Energy Market Operator has said the state’s high renewable power output has forced it to regularly intervene in its market to maintain system security of the grid.