Interesting price structure

Well, I will give it some credit at face value… This is could really shake things up in a good way.
Well done Aussies, well done.

The 150MW solar tower and molten salt storage plant to be built in Port Augusta has been made possible by a ground-breaking pricing and contract structure that could help completely reshape Australian power markets, including the end of “baseload” power as we know it.

The South Australian government announced last week that it had signed a deal with US company SolarReserve to build the 150MW solar tower with molten salt storage project – to be known as Aurora – just a few kilometres from the now closed Northern coal-fired power station.

The output of Aurora will be around 500GWh – roughly the same as the annual consumption of the state government and the various assets it owns.

But it is the unique nature of the contract that explains the difference between what the government will pay SolarReserve ($75-$78/MWh), and what SolarReserve will receive, and will likely serve as a template for more “dispatchable” renewable energy projects in the future.

Essentially, Solar Reserve will provide the S.A. government with some of its needs from other sources in the market when demand and the price is low. Aurora will cover the government for energy and prices when the government’s demand is at its highest, around the middle of the day.

But because the government can and will get some cheap power elsewhere, Aurora will be able store its solar power in its molten salt storage tanks so it can sell into the market at the system peaks, in late afternoon and early evening, when the market prices are highest, boosting its revenue.

In English. They have made a really sweet win win deal.
Aurora will sell their electric at the price set by the government at the times the government needs it, at all other times, they can do what they want.
The government wins because they get renewable energy at a price they can afford, Aurora win because while they cant make money at the government price, they can sell it latter (or any other time) at a price that will make them money. Thus the project gets funded because the base-load price is ‘guaranteed’.

Nice work guys. Love it. Hope it works out in practice as well as it sounds.