BY RENFREY CLARKE
Mention electricity supplies to a South Australian, and the answer is unlikely to be polite. As well as summer blackouts, there are pool prices that doubled during 2000 in the now-privatised state grid, and the prospect of huge price increases for domestic users. Add to that a mention of the Murray river, and the conversation could get quite nasty. The new, ill-planned market in water rights has allowed extractions from the river to rise sharply, threatening to turn South Australia's lower Murray into a salt-laden sump.
So if Australian engineers were to come up with world's-best technology that used the power of the sun to produce both electricity and pure water at quite reasonable prices, as well as promising a knowledge-intensive export industry for a distressed town, the state government and local investors would leap at it, right?
Sadly, it hasn't been quite like that. The "solar oasis" technology is real, developed to a high state over more than 20 years by a team under Australian National University (ANU) engineering professor Stephen Kaneff. A detailed economic study in 1999 by the firm KPMG Consulting indicated that a plant using Kaneff's designs, and located at Whyalla on South Australia's Spencer Gulf, would be viable at the electricity pool prices applying in SA at that time.
Since then, wholesale electricity prices in SA have spiralled, as the firms now controlling power generation have withheld supplies in order to maximise their profits. Nevertheless, the Solar Oasis project has stalled. Uncertainties about where prices will finish up have helped give pause to potential investors. Also, private entrepreneurs would clearly prefer others to pay for the ground-breaking pilot installation, putting their money in only when the Solar Oasis is a proven concern.
Vigorous government intervention is clearly needed. The Liberal state government's Department of Industry and Trade has in fact reacted positively to the project, funding the KPMG study. But the response from SA Water, the state government-owned water supply firm, has been tepid.
Senior executives of SA Water are believed to be willing to include solar distillation of water in their longer-term perspectives. Middle-level managers and engineers, however, seem more impressed by the fact that there is ample unused capacity in the pipeline that connects the upper Spencer Gulf cities to the Murray. As a corporatised body, SA Water is charged with making a profit — not with furthering visions for environmentally sustainable water use.
Above all, the office of Premier John Olsen has not championed the Solar Oasis. Wide awareness of the project's potential would create pressures for the cost of the plant — estimated at $80 million — to be funded from government sources.
World's-best technology
As envisioned by Kaneff, and enthusiastically supported by Whyalla's city council, the Solar Oasis would consist of an array of two hundred 22.6-metre diameter paraboloidal dishes, automatically tracking the sun. Boilers at the focal point of each dish would create high-temperature steam, which would be led off to a conventional steam turbine plant to produce a total of 22.2 megawatts of electricity. At night and in overcast weather, this output would be maintained by a gas-fired backup boiler.
Heat from the process would then be used to distil seawater. For this aspect of the project, Kaneff has chosen the multiple effect distillation process, which is highly efficient, has low maintenance costs, and can be bought "off the shelf". Output of fresh water from the Solar Oasis would be about 20 megalitres per day — more than enough for the 23,000 residents of Whyalla, though not for the nearby OneSteel iron and steel works.
Brine from the distillation process would be available for salt production, already an established industry in Whyalla. Using this brine would allow the area needed for evaporating pans to be reduced by as much as 80%.
The area of the Solar Oasis technology that is essentially new — that is, never used before on an industrial scale — is the solar dishes. Unlike many innovations, Kaneff's precisely tracking dishes hold few risks for investors. An array of similar though much smaller collectors has functioned at White Cliffs in western NSW since 1982. Since 1994, Kaneff's team has successfully operated a full-size test dish at ANU.
Commercial investors, of course, will be looking not only for trouble-free operation, but for competitive costs. Here, the ANU researchers expect to go closer to matching the cost structures of conventional thermal power plants than any previous solar power initiative. With gas-fired backup generation and water sales at the anticipated price, the KPMG report concluded, the Solar Oasis would be economically viable at the average 1999 electricity pool price in SA of about $45 per megawatt-hour.
As a means of limiting greenhouse emissions, the Solar Oasis has strong attractions even when employed with gas backup. Kaneff has calculated that the plant would achieve a "carbon emissions reduction" index, relative to a coal-fired plant, of 82 per cent. In terms of the cost of "carbon avoidance", the Solar Oasis would be exceptionally cheap, comparable with wind and geothermal generating.
Water
According to the KPMG report, the solar array with gas backup but without desalination would still be economically viable. The whole point of developing the Solar Oasis, however, is environmental protection — and to pass up a chance to avoid pumping water from the Murray, even if the cost of water supplies becomes marginally greater, would be an environmental crime.
SA Water recently ran an expensive advertising campaign promoting itself as a caring custodian of the state's most precious resource. However, the company is required to operate on business lines, and gets no bonuses for environmental soundness. So if SA Water is to buy water from the Solar Oasis, the marginal cost will have to be less than that of sending supplies to Whyalla through the existing pipeline. Or else, environmentalists will have to force the South Australian government to pay the difference.
In assessing the commercial viability of the Solar Oasis, KPMG Consulting estimated a sale price for the water produced of 80 cents per kilolitre, while noting that with the price as low as 70c per klitre the plant would still recover its costs. SA Water, meanwhile, has not responded to calls to specify the marginal cost of the water it supplies to Whyalla; environmentalists in the city guess that this is around $1 per klitre, but the real figure may be considerably more. Quite probably, the water company has little notion of what its supplies cost, and its failure to find out reflects entrenched resistance among its managers to new and challenging ideas.
In theory, a solar desalination industry in the upper Spencer Gulf region could pump water back through the pipeline, to take the place of Murray water in South Australia's extensive water supply network. The cost of this desalinated water would be quite acceptable for urban uses, but too expensive for commercial horticulture, and far above the price of Murray water currently bought by South Australian irrigators from license-holders in NSW and Victoria.
It is interesting, though, to reflect on what the cost of Murray water would be if it included the costs of salinity management in the Murray-Darling basin. Indications are that with these costs factored in, the real cost of Murray water may be above $1.30 per klitre.
One disadvantage of solar power is that the big costs come first, in the shape of relatively expensive plant and equipment; only later do the savings resulting from a free source of energy kick in. In an effort to limit start-up costs, the Solar Oasis dishes have been designed as modular units suited to mass production.
The sticking-point: capitalism
Kaneff's team are continuing to develop their technology. A new thrust of their research involves using the high temperatures created by the solar dishes to break down ammonia into nitrogen and hydrogen, which can be stored and later recombined in a furnace — resulting in a solar installation able to produce energy around the clock.
The plans for the Solar Oasis, however, have made little progress since KPMG presented its report in November 1999. The reasons are largely political.
There is nothing in principle to stop the South Australian government moving back into the field of electricity generation. But there has not even been a hint that Olsen and his ministers might take on the start-up costs of the Solar Oasis project. Protecting the environment and even creating a promising new industry clearly count for less with the Liberals than their ideological belief that utilities should be run for private profit.
Of private companies that have considered putting money into the Solar Oasis, the most serious about the project have been eastern states electricity generating firms. If anyone can say whether SA electricity prices in coming years will make the Solar Oasis viable, it is these energy giants. But the firms involved are understood to be suspicious of the project's "pilot" status, and to be looking for no-risk guarantees — big premiums for electricity sales, and favourable prices for water.
Meanwhile, private ownership of basic infrastructure threatens the plans for the Solar Oasis in quite direct fashion. The project depends on a supply of natural gas, and the proposed site near Whyalla is close to the pipeline that takes gas to Santos Ltd's Port Bonython fractionating plant. But will Santos part with gas from the pipeline, when it is benefiting from high world prices for its liquefied natural gas exports? There have been no promises.
Among spokespeople for capitalism, it is holy writ that private property and market mechanisms need to rule if innovation is to flourish and new, knowledge-intensive industries are to arise. Among enthusiasts for the Solar Oasis, this line is wearing thin — as thin as SA Water's claims to care about the environment.