The incoming Queensland government wants to pull out of an agreement formed by its predecessor to provide $75 million towards the $1.2 billion Solar Dawn solar research and power plant at Chinchilla, west of Toowoomba, Premier Campbell Newman said yesterday.
The Solar Dawn project is set to be one of the largest of its kind in the world.
Mr Newman said following the first LNP party room meeting the cost of the federal government's looming carbon tax would affect the state economy and public sector, and said Queensland would be “paying twice” if state-based climate change initiatives were not dumped.
However he said the green programs set to be axed under his government could be revived if the carbon tax was scrapped.
Mr Newman said during the state election campaign he wanted to dismantle Queensland’s carbon reduction schemes to save $270 million for the state budget.
Solar Dawn is a 250 megawatt solar thermal project using sun-heated water in tubes to produce steam-driven energy, and is backed by the federal government and was supported by former Premier Anna Bligh.
It is part of the federal government’s Solar Flagship Program. A similar project at Moree, in New South Wales, has received federal funding under the same program.
The University of Queensland has developed a $60 million research project to link to Solar Dawn.
UQ's Professor Paul Meredith, the head of the university’s renewable energy research, said he was worried the LNP’s decision would damage what he thought was a worthwhile project and one that provided almost 400 jobs.
‘‘Hypothetically if the state contibution of $75 million does not flow that leaves a very big hole in the project’s funding,’’ Professor Meredith said.
‘‘And I think it is anybody’s guess what the Federal Government will do at that point.’’
The Gillard Government has promised $475 million and the Bligh Government agreed in February this year to give $75 million in a ‘‘conditional agreement’’ to help build the huge solar thermal plant, which is scheduled to be operating by December 2015.
The project must reach ‘‘financial close’’ by June 30 this year.
Federal Energy Minister Martin Ferguson, speaking in Queensland yesterday, said he was surprised the new state government was considering backing out of Solar Dawn.
‘‘As the ’Sunshine State’, Queensland is well-suited for a significant solar thermal project able to competitively deliver electricity to the grid,’’ Mr Ferguson said.
‘‘Given the new Premier’s focus on jobs and training, it is worth noting the Solar Dawn project brings with it an average of 300 jobs during the three-year construction phase, with a peak of 450 jobs.’’
Mr Newman has an election promise to reduce Queensland’s unemployment to four per cent in six years.
‘‘If the new Queensland Government chose to breach the existing financial commitment to the Solar Dawn project, the Australian Government would need to consider its own position,’’ Mr Ferguson said.
The other main funding for Solar Dawn is coming from two joint venture partners: AREVA Solar and Wind Prospect CWP.
Solar Dawn project director Anthony Wiseman said his organisation had received no advice from the incoming Newman government that it would not provide the money.
‘‘Solar Dawn has not been notified of any change of intentions of the Queensland Government under the terms of the existing conditional agreement and we continue to work with relevant parties on developing our proposed project,’’ his statement read.
Solar Dawn would not answer what impact the removal of the $75 million in state government funds would have on the project.
Mr Newman said the LNP would examine any contractual commitments entered into by the previous government, but would not “in some silly way” scrap the contract if the cost outweighed the savings.
“If we can exit this project and save $75 million we will,” Mr Newman said yesterday.
Mr Newman has said the Queensland Government was contributing to projects that should federally funded.
Huge Solar Project in Limbo as Newman Pulls Funding
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