How an Australian Mining Town Became a Solar Power Trailblazer

From Birthplace of BHP To Solar Trailblazer

Broken Hill spawned the world’s largest mining company and generated more than $75 billion in wealth. Now as its minerals ebb, Australia’s longest-lived mining city is looking to tap a more abundant resource.

On the sun-baked edge of the Outback city, 700 miles west of Sydney, a solar farm the size of London’s Hyde Park shimmers like an oasis — its panels sending enough electricity to the national grid to power 17,000 homes a year. Combined with a sister plant, the AGL Energy Ltd. and First Solar Inc.project is the largest of its type in the southern hemisphere.

Clean energy advocates are counting on the 140-hectare (346-acre) development to make Broken Hill, which at one time boasted the world’s most successful silver mine, a trailblazer once again. The birthplace of Broken Hill Proprietary Co., whose 2001 merger with Billiton Plc formed the mining giant BHP Billiton Ltd., will help pave the way for more projects that profit from the sun’s power.

Power conversion stations are positioned at regular intervals within the rows of solar panels at the AGL solar farm.
Power conversion stations are positioned at regular intervals within the rows of solar panels at the AGL solar farm.
Photographer: Carla Gottgens/Bloomberg

“It’s giving birth to the large-scale solar industry in Australia,” said Adam Mackett, AGL’s project manager, as he strolled among the 678,000 solar panels under a cloudless blue sky. “Hopefully, from Broken Hill’s point of view, they’ll see this as the start of something bigger.”

Australia gets more solar radiation per square meter than any other continent. Yet while the nation leads the world in installing rooftop solar panels, it trails 19 countries from Bulgaria to Ukraine in producing the power at solar farms. 

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Solar accounted for about 2 percent of Australia’s electricity generation last year, according to the Clean Energy Council, an industry group in Melbourne. Fossil fuels, by contrast, made up almost 87 percent of the mix, reflecting the nation’s reliance on mining.

“We’ve been so rich underground, we shouldn’t ignore what we have above ground,’’ said Esther La Rovere, a Broken Hill native and co-owner of the Palace Hotel, a 48-room inn featured in the 1994 movie “The Adventures of Priscilla, Queen of the Desert.” “Broken Hill does need to reinvent itself and be part of new technologies and ways of doing things — and we’ve got plenty of sunshine.”

Mining is so inextricably linked to Broken Hill that even the 126-year-old hotel was once connected to a nearby mine by an underground tunnel. An enormous pile of discarded rocky earth looms over the city, whose street names are inspired by the minerals and compounds that have helped sustain it, like Argent, Cobalt, Bromide, Sulphide and Oxide.

Silver City

Broken Hill is home to the world’s largest known lead-zinc-silver deposit. Its 8-kilometer (5-mile) ore body has been mined continuously since the 1880s and is now petering. Just two mining companies remain — Japan’s Toho Zinc Co. and China’s Shenzhen Zhongjin Lingnan Nonfemet Co. — and the city’s population has almost halved from about 35,000 in 1915.

While the Silver City has drawn tourists for decades, other new enterprises are needed to spur the local economy, and the potential for another solar project is being explored, said Mayor Wincen Cuy.

“Two things we have plenty of are sunlight and wide-open spaces,” Cuy said in his office, a few kilometers from the AGL-First Solar development. “If we can become the capital in Australia for solar, that would be pretty impressive.”

Original mine shaft structures and buildings stand as a tourist attraction as part of the Junction Mine, in the township of Broken Hill.
Original mine shaft structures and buildings stand as a tourist attraction as part of the Junction Mine, in the township of Broken Hill.
Photographer: Carla Gottgens/Bloomberg

The A$440 million ($314 million) solar farms in Broken Hill and Nyngan, about 590 kilometers east, received A$232 million in grants from the New South Wales state and federal governments, and new ventures are likely to need their support. The Australian government has committed A$350 million more for utility-scale solar projects and is reviewing applications for funding.

‘Good for Humanity’

Companies such as First Solar, the largest U.S. solar manufacturer, are keen to develop more plants in Australia, said Jack Curtis, its Asia-Pacific manager. The industry is looking for assurance that Prime Minister Malcolm Turnbull is more climate-friendly than his predecessor, Tony Abbott, who said coal was “good for humanity.”

Australia’s climate policies have been criticized for not going far enough. The government’s commitment to cut carbon emissions by 2030 is projected to leave the country as the highest per-capita polluter among Group of 20 nations after Saudi Arabia, according to the Climate Institute, a Sydney-based non-profit organization. Solar is among the sources that could help.

“It’s another opportunity which doesn’t rely on digging stuff out of the ground,” said AGL’s Mackett. Shares in the Sydney-based utility have climbed 29 percent to A$17.20 so far in 2015, compared with a 5.6 percent slide in the benchmark S&P/ASX 200 index, as the company under new Chief Executive Officer Andy Vesey expands in green energy. 

The sprawling solar farm — near the hills where Mel Gibson tore up post-apocalyptic highways as the Road Warrior in the 1981 movie “Mad Max 2” — reached full production in October. During construction, about 150 people were employed there, resulting in a A$15 million boost to the local economy, AGL estimates. Now, kangaroos occasionally outnumber the two or three people needed to run the plant.

Better Image

Kangaroos stand next to a row of photovoltaic panels.
Kangaroos stand next to a row of photovoltaic panels.
Photographer: Carla Gottgens/Bloomberg

Geoff Luke, a zinc miner’s son who sold part of his property to AGL in 2012, sees other benefits for the city. “Broken Hill needed something different,’’ said Luke, 64, who owns the Black Lion Inn and sometimes fields questions from tourists about the solar plant. “I think it’s good for the image of the town.”

The successful completion of the Broken Hill and Nyngan farms will give banks and contractors more confidence in working with major solar developments in the future, AGL’s Mackett said.

The Australian government aims to get almost a quarter of the nation’s power from clean energy sources by 2020. That will drive a 15-fold increase in large-scale solar capacity by 2021, according to Bloomberg New Energy Finance. For now though, solar power in Australia is more expensive than wind, and AGL says an over-supply of aging coal-fired power stations needs to be rationalized to encourage investment in clean-energy sources.

A decline in development costs for solar farms should close the gap with wind and stimulate more investment, said Ludovic Theau, executive director at the government’s Clean Energy Finance Corp. “We do see a substantial step-up in activity,” he said. “The next five years for us are absolutely critical.”

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