Oswal scraps Pilbara as solar project site

10 March 2009

Indian fertiliser baron Pankaj Oswal has axed plans for a $1.5-billion solar energy plant in the sun-drenched Pilbara district of Western Australia, reportedly due to land acquisition problems. Instead, he has moved the ambitious project to South Australia.

Reports of the move came as the federal government put the finishing touches on the draft legislation for its emissions trading scheme, which is slated for release on Tuesday.
Evidently, Perth-based Oswal's attempts to secure a 1,300-hectare parcel of land in the Pilbara were proving too difficult, and this led him to instead enter into talks with the Coorong District Council, about 100 km south-east of Adelaide.

Pilbara's loss could be Coorong's gain, with Oswal's ambitious plan to build one of Australia's biggest solar power plants likely to create much-needed jobs for the drought-affected district.

Oswal is in talks with South Australian electricity buyers to establish at what price he could sell his solar-generated electricity, which generally costs about four times as much to produce as gas-fired power. He plans to finance the project through an unspecified mix of family funds and debt.

Despite the big capital cost, high operating costs and long pay-back period, solar power is expected to become increasingly attractive in response to the Rudd government's drive to introduce an emissions trading scheme and reduce Australia's greenhouse gas footprint. The emissions trading scheme is likely to make coal or gas-fired electricity more expensive, reducing its cost advantage over solar power.

Coorong chief executive Tim Drew confirmed on Monday that Oswal had approached the council with his solar project, adding that ''we are favourably inclined towards it''.
He said the council expected to settle on the acquisition of a 809 hectare parcel of land, understood to be in the Tailem Bend area, this month.