SYDNEY (BLOOMBERG) – Australia granted “major project status” to an ambitious A$22 billion (S$21.7 billion) plan to export power from a giant solar farm in the country’s north to South-east Asia via undersea cable.
The status recognizes the “strategic significance” of the project, which is expected to inject billions of dollars into the economy and create thousands of jobs, Angus Taylor, minister for energy and emissions reduction, said in a statement on Wednesday (July 29).
The Australia-Asean Power Link envisions connecting the world’s largest solar farm and battery system in Australia’s Northern Territory to Singapore and Indonesia via a 3,700 kilometre undersea cable. Similar proposals for long-haul, transnational power shipments have been pursued in other regions, including from North Africa to Europe or from Mongolia to Japan and South Korea.
The high-profile boost by the Australian government contrasts with the relatively muted interest from Singapore, which is expected to be its main customer. The city-state’s Energy Market Authority acknowledged in November that it had met with the project’s developer, Sun Cable Pty Ltd, but has shown little public appetite in the venture.
In response to queries from Bloomberg, a spokesman for the EMAÂ said it has had meetings with Sun CableÂ but canâ€™t comment further due to commercial sensitivities.
â€śSingapore is exploring ways to tap on regional power grids for cleaner energy and to overcome land constraints,â€ť the spokesman said in an emailed statement. â€śHowever, we will need to balance this with potentially higher electricity costs and higher energy security risk.â€ť
Sun Cable says the project can supply a fifth of Singapore’s power needs, helping to reduce the city-state’s reliance on natural gas imports. The project, which is backed by Atlassian co-founder Mike Cannon-Brookes and Fortescue Metals’ founder Andrew Forrest, plans to start marine survey work from August. The company is targeting commercial operations to begin in 2027.
Singapore-based Sun Cable envisions a 10-gigawatt solar farm and energy storage facility of up to 30 GWh in the Northern Territory, with the marine cableÂ link to Singapore and eventually Indonesia.
In a jointÂ statement on Wednesday, Mr Taylor and Minister for Industry, Science and Technology Karen Andrews saidÂ thepower link Â would be one of the worldâ€™s largest dispatchable renewable electricity systems, supported by the worldâ€™s largest battery and solar farm in the Barkly region near Tennant Creek.
Ms Andrews said the project would create 1,500 jobs during construction, 350 ongoing jobs in Australia, as well as indirectly supporting around 12,000 Australian jobs. It will also see the production of a new solar farm manufacturing facility.
â€śNot only will this power link make Australia a world-leader, it will also create significant economic and employment opportunities here at home with about A$8 billion of the A$22 billion investment to be injected directly into Australia,â€ť she said in the statement.
â€śItâ€™s a strong statement to all Australians that despite the immediate challenges of the Covid-19 pandemic…industry is still investing in opportunities that will drive our economic recovery and create much needed jobs,â€ť she said added.
Sun Cable Chief Executive David Griffin was not immediately available for comment on Thursday (July 30), but said last November the company aimed to secure financing for the project by late 2023 after completing design work and gaining approvals.
With â€śmajor project statusâ€ť, Sun Cable will get government support in steering through all national and regional approvals.Â A year ago, it won major project status from the Northern Territory.
â€śThis project is helping to grow a new industry, utilising intercontinental HVDC (high voltage direct current) submarine transmission systems to supply renewable electricity to major load centres in the Indo-Pacific and support the regionâ€™s low-emission goals,â€ť Griffin said in the same statement on Wednesday.