The Blended Solution

If high capacity power lines are built to Roxby Downs, the best way to get power flowing down them would be through transitory premium feed in tariffs. This would reward early movers in building new electricity generation capacity. 'Power parks,' or state-sponsored energy generation experimentation areas could also be created. This was a concept developed by 2006 Adelaide Thinker in Residence Stephen Schneider, a climatologist from California's Stanford University.

If the current carbon-adjusted cost of power in Australia (according to ANSTO) is about 8-9c per kilowatthour, another 3-10 cents of premium feed in tariff incentives could be added to encourage investment in new electricity generation capacity. The premium could then be cut annually in fixed increments over 10-15 years. To give an idea of how much subsidy this would entail, 6,000MWs of clean energy produced from a power park with a 6c/kwh subsidy would initially amount to $315 million a year and fall year by year until it hit zero.

Construction costs of new power line infrastructure to isolated areas could be paid down by non-discriminatory, common carrier transit fees. This would help eliminate a major source of unfair competitive advantage enjoyed by current energy producers with existing power lines, many of which were originally subsidised with state and federal money.

With the long-term certainty gained from such policies as guaranteed feed in tariffs and guaranteed delivery to market, investment will follow. Efficient new power producers will expand. Poor performers will be eliminated. The best technology will win.

Consider the future price curves already outlined. Given that concentrating solar power and geothermal are ideally suited to colocation in the Outback, a bundled energy price comprised of equal amounts of each would be cheaper than coal-fired power with hypothetical carbon capture and storage. New solar and geothermal supplies also could be on line as early as 2011. Carbon capture and storage won't be ready until 2015. By that year, a CSP/hot dry rock combination would be cheaper than nuclear, which itself couldn't come on line until 2020.

Combinations of concentrating solar power, geothermal and even solar PV from the Outback hold the promise of very attractive blended energy prices

Concentrating solar power and geothermal can provide huge amounts of Outback-generated electricity cleanly and cost effectively and much earlier than carbon capture and storage or nuclear. That isn't to say carbon capture and storage and nuclear shouldn't be considered. But with proven, cheaper technology available now -- does it make sense to wait? Why not build out the proven technologies now, and the speculative ones later?