A $1.2 billion concentrated solar thermal project in Australia has been shelved after developers failed to secure a supply agreement and forfeited $500 million in federal and state funding.

The Solar Dawn Consortium led by France’s AREVA said it was committed to the 250-MW solar thermal power facility in South West Queensland, but it would "no longer be pursuing [its] development." The consortium failed to meet a June 30 financing deadline, which resulted in the withdrawal of $75 million in funding by the state government of Queensland.

On Monday, the Australian Renewable Energy Agency (ARENA), which approves renewable energy projects in Australia, decided not to furnish the project with nearly $464 million in federal funding. ARENA Chair Greg Bourne told Australian television station ABC that Solar Dawn and ARENA both agreed that the project wasn’t ready to proceed. This was because of a combination of things, he said: "One is size, it was a very large-sized project. They had a look at resizing it, but in the end the overall project we did not believe would have been value for money and would have brought the learnings we need to see to Australia and they agreed with us on that."

ARENA on Monday also declined to fund a 180-MW solar photovoltaic project in Victoria proposed by EnergyAustralia, saying it wants to fund smaller projects in regional and remote Australia.

The independent statutory agency has only been operating since July 1 and was established by the Australian Government as part of its Clean Energy Future package. The recently passed package includes a carbon pricing mechanism and a renewable energy target that requires generators to source 20% of their electricity from renewables by 2020.

On Monday, citing a newly published general funding strategy for the next three years, ARENA’s Bourne told ABC that the agency would not favor particular technologies. Rather, "We’re going to be looking through the eyes of themes and outcomes," he said. "So one of the things that we announced today was we will be looking at building programs around remote and regional power, where we might get a lot of learning putting renewable energy into mini and micro grids and displacing diesel. So that is a real opportunity."

Sources: POWERnews, Solar Dawn, POWER, ABC

—Sonal Patel, Senior Writer (@POWERmagazine)