Combining PPAs with demand response delivers savings for businesses

Share

Large industrial electricity consumers in Australia have been turning to renewable PPAs, seeking to ensure certainty of supply and pricing. A new report shows that combining these purchase agreements with demand response measures can yield even greater savings.

According to new research from the Institute for Sustainable Futures, University of Technology Sydney, in partnership with WWF-Australia, and energy retailer Flow Power, Australian businesses could save up to 33.3% on energy costs a year on top of that delivered by a PPA by combining it with demand response.

The report Best of Both Worlds: Renewable Energy and Load Flexibility for Australian Business Customers focuses on three large Victorian-based businesses – industrial manufacturer ANCA, water utility Yarra Valley Water and food company Select Harvest, as representatives of different industries.

Taking into account varying approaches to demand response, such as shutdowns of nonessential equipment and on-site electricity generation, the report showed that all three businesses have locked in additional savings ranging up to 33.3% on top of financial savings provided through corporate PPAs.

“Where the financial savings delivered to customers on corporate renewable PPAs over the last year are just a small snapshot of ten-year or more agreement, demand response gives businesses greater flexibility to control the prices that they pay,“ says Matthew van der Linden, Managing Director of Flow Power.

Corporate PPAs in Australia have been on the rise, as an alternative for some of the utility scale projects currently under development that may encounter difficulties in signing a long-term offtake agreement with a utility.

Australia’s largest solar PPA contracting for 88 MW was recently inked by Bluescope Steel with ESCO Pacific to cover 20% of its electricity requirements over seven years from NSW’s Finley Solar Project. Other notable ones were signed by SIMEC ZEN Energy and Australian brewer CUB, as well as the University of New South Wales, which is seeking to become 100% solar powered.

According to Bloomberg New Energy Finance‘s 2H Corporate Energy Market Outlook report, published on Friday, corporate purchasing set a new global record last year, surpassing 5.4 GW of clean energy procured, with more than 1.1 GW purchased by Facebook alone.

 The report also showed that corporations have procured 7.2 GW of clean energy so far in 2018.