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Mugga Lane solar farm opens, bringing ACT to 35 per cent renewable energy

The third solar farm funded by the ACT government opened this week, bringing the ACT to 35 per cent renewable energy.

The Mugga Lane solar farm, owned by the Maoneng Group, is being paid $178 for each megawatt hour of electricity it produces, to a maximum of 24,600 megawatt hours a year - or $4.38 million a year.

It is the third and final solar farm to open under the ACT government's ambitious renewable energy scheme. The others are Royalla, which is being paid $186 for each megawatt hour, to a maximum of $7.87 million a year, and One Sun, which is also being paid $186 a megawatt hour, although for a much smaller operation, with a maximum of $2.76 million purchased a year.

The three solar farms come on top of five wind farms being funded for 20 years by the ACT, the biggest by far being the Hornsdale wind farm in South Australia.

Wind accounts for the vast bulk of the ACT's renewable energy, with 600 megawatts of capacity by the time all of the wind farms are built. The three solar farms between them have just 40 megawatts of capacity.

Wind is also much cheaper than solar, with the ACT paying prices between $77 and $92 for each megawatt hour of wind electricity.

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The ACT government says the renewable energy deals will cost ACT households an average $240 a year at the peak in 2020.

But Climate Change Minister Shane Rattenbury said this week the actual cost would depend on prices in the wider wholesale electricity market. The ACT had signed a "contract for difference" with each of the renewable energy suppliers, guaranteeing to pay a set price for 20 years, but if the spot price in the wider market was higher, the renewable operators effectively paid the difference back to the ACT.

Mr Rattenbury said the Mugga Land solar farm, with 48,000 panels, would produce enough electricity to power 3000 homes, and was another significant milestone.

The site had hosted school and university visits, would work closely with the ANU, and had plans to graze sheep around the panels and establish a community garden.

Mr Rattenbury rejected the suggestion that coal or gas-fired generation was necessary to guarantee supply, saying new  Australian National University research showed that Australia could switch entirely to renewable energy, using pumped hydro storage. The move would be cheaper than coal and gas, he said.

The key to reliability was to ensure proper connectivity across the eastern seaboard so power could be fed reliably from wind in South Australia or solar in Queensland when it was needed.

Mr Rattenbury said the recent heatwave was the "final nail in the coal coffin".

"Far from being to blame for electricity supply problems during the heatwave last month, renewables maintained supply while big fossil fuel plants failed in the heat," he said, referring to the two NSW coal-fired power stations that had operated below capacity because of the extreme heat.

"In case the federal government's fiction hasn't been debunked enough, the body of evidence supporting the business case, as well as environmental case, for facilities like Mugga Lane and the transition to renewables is growing stronger week by week," he said, with the cost of solar power diving in recent years to the point it was now more affordable than new fossil fuel and nuclear power.