Responsible Investor

Solar power by cable

From panels in the Australian desert to a city hungry for (clean) energy. 4,000 kilometres apart

A power-hungry city in Asia, two Australian billionaires, and an innovative project able to transfer clean energy from one continent to another. The result of this bizarre, almost alchemic, combination marks the start of an innovative project that originates in the Australian deserts and finishes in Singapore, transforming the power of the sun into clean energy that will feed this city-state, otherwise known as the Lion City. How? By transferring energy from what will become the world’s largest solar farm through 3,800 km of high-voltage, direct-current submarine cables. An ambitious project costing more than $13 billion in investment for the solar farm alone, covering an area of around 15,000 hectares. The energy will be produced and stored within a huge storage facility under the sun which brings light and heat to Tennant Creek in Australia’s Northern Territory, 1,000 kilometres south of Darwin. The production capacity of the site could cover up to one-fifth of the Lion City’s energy demand, not to mention all the other countries, near and far, that could use or copy the initiative.
 
Finding the path wasn’t easy: Sun Cable, based in Singapore, Australia and Indonesia, found investment through two Australian entrepreneurs: iron magnate Andrew Forrest (Fortescue Metals) and technology giant and co-founder of Atlassian-Software, Mike Cannon-Brookes. Part billionaires, part philanthropists and part visionaries, they believed in the project and backed a large part of the investment, where the numbers and challenges involved are rather significant. Then it was necessary to convince other investors as well as Singapore. But the project has gained traction.

About 95% of Singapore’s electricity is generated from liquid natural gas (LNG), but this, of course, is an imported energy resource, and so the Lion City’s leadership took the decision to focus on solar power. Sun Cable then saw an opportunity to kick start the project: according to the company, Singapore’s reliance on imported LNG leaves electricity consumers excessively exposed to the whims of the market, often very volatile in the hydrocarbon sector. The challenge, according to Sun Cable, is to produce about one-fifth of the electricity that Singapore requires through solar power from the Australian desert, transmitted via a High Voltage Direct Current (HVDC) cable. Australia’s strong relationship with Singapore, its stable economy, and its political and legal framework, will ensure – according to the company – a secure supply for the city-state. And not only that. The Tennant Creek battery storage facility will allow not only Singapore, but also the Northern Territory itself, to benefit from a more diversified electricity supply, increasing resilience and helping the project users to achieve the goals of reducing greenhouse gases set out by the Paris Agreement.

In an interview with the South China Morning Post, Andrew Koscharsky, chief commercial officer at iSwitch (private electricity company in the Lion City), explained to the Hong Kong newspaper that “Singapore’s appetite for clean energy was growing and that the plan was a “win-win” for everyone”. Koscharsky also points out that “Singapore’s liberalisation of the retail electricity market, which empowered consumers to pick a provider and therefore an energy source, could serve as a guide to other countries in Asia”. A project that could act as a pilot for many Asian countries, from Vietnam to the Philippines. But also China, the country in Asia with the highest demand for energy. Or India, whose Prime Minister, Narendra Modi, launched the slogan: one sun, one world, one grid.

A bright future? There are several risks, starting with the potential failure of the submarine cable (there could be more than one), as well as maintenance costs, the environmental impact (in Australia), and the question of end-of-life panel (or accumulator) disposal. This problem has long been the subject of research without great results and is one that concerns environmentalists.