Long read: From rooftops to innovative PPAs: Australia’s universities go solar

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In the prevailing discourse, universities are referred to as generators of knowledge, which play a paramount role in a global system increasingly driven by information and ideas. But today, they are also coming to the fore as generators of renewable energy, blazing a trail for other -big energy consumers looking to quit the grid in a post-subsidy world.

Following a trend towards campus carbon neutrality initiated in the U.S., Australian universities are increasingly relying on solar power in catering to their energy needs. It all started with installing rooftop solar systems, but is now transitioning into more comprehensive energy solutions.

Stepping up the game

There are a number of Australian universities that have integrated or are looking to add battery storage to their solar arrays. For instance, the University of Southern Queensland has installed a battery at its integrated solar car park, while the University of Adelaide has a 2 MWh storage system coupled with its 1.2 MW PV installation.

Looking to achieve zero emissions by 2030, Monash University is currently developing a 4 MW PV + 1 MWh battery storage microgrid at its Clayton Campus in Melbourne. The project is expected to meet the energy demands of the campus, provide ancillary services to Victoria’s grid, and serve as a living laboratory where technology, business models, and regulatory regimes can be tested.

“We’ve installed more than 4,000 solar panels on our campuses since the Net Zero Announcement, and now have nearly 2 MW of rooftop solar capacity across our four Australian campuses. The plan is to increase this to 7,100 solar panels, or 4 MW by the end of 2018,” says Scott Ferraro, Program Director of the Monash University Net Zero Initiative.

In addition to the microgrid, which will serve as a working model for a 100% renewable powered smart city, the university has announced the signing of a long-term power purchase agreement (PPA) with the 226 MW first stage of Murra Warra Wind Farm – the largest Australian wind project to be enabled by corporate buyers – i.e. a consortium of companies led by Telstra.

Under the offtake deal, Monash University will buy not only electricity, but also large-scale generation certificates (LGCs), thus ensuring it meets its goal to be 100% powered by clean renewable energy by 2030.

Large-scale additions

In 2016, the University of New England in New South Wales was the first to announce plans to build its own large-scale solar project to supply up to half of its electricity requirements.

The $14.2 million solar farm, which was finally approved in March of this year, will be constructed in two stages and incorporate a battery storage system. The first stage is confirmed to involve the development of a solar farm with a capacity of approximately 3.2 MW.

But, one of the strongest renewable energy portfolios among Australian universities is held by the University of Queensland (UQ), which has this year alone announced a series of groundbreaking projects.

One of these was its plan to develop a 64 MW solar farm near Warwick, which will put UQ in the position of being both a large energy consumer and a large energy generator. The university calculates the utility-scale solar farm, which comes with a price tag of AU$125 million (US$90 million), will pay for itself over the life of the project, through electricity savings.

Touted as a world first university to generate 100% of its electricity from its own renewable energy asset, UQ is planning to sell excess energy generated by the farm into the National Electricity Market (NEM), helping to put downward pressure on wholesale energy prices for all consumers.

As for backup power, UQ is required to become exposed to the 30 minute wholesale energy market ‘spot price,’ which comes with a risk of market volatility. “This risk will be managed through specialist financial hedging instruments such as ‘cap’ contracts,” UQ says, adding that these arrangements are still to be finalized.

A PPA with a third party is also on the cards, as UQ is looking to partner with suitable organizations that may be interested in sharing the benefit of the surplus energy generated from the project that exceeds the total consumption of UQ’s sites.

In the long run, UQ may even consider getting further off the grid, as its Warwick solar farm is designed to be battery storage-ready. In the meantime, the university is first pursuing opportunities for energy storage ‘behind the meter’ at its sites, in order to load shift and compliment generation at the Warwick Solar Farm.

This includes plans for 1 MW/2 MWh of new lithium-ion storage to be commissioned at the St. Lucia campus in early 2019, as well as the existing 600 kW/760 kWh of lithium-ion storage already in use at the Gatton campus. In addition, UQ is implementing innovative alternatives to batteries, such as thermal energy storage.

A new kind of off-site PPA

In what is described as the first deal of its kind in the world university sector, the University of New South Wales (UNSW) has worked out a comprehensive solution to become 100% solar powered.

“UNSW Sydney’s objectives were to become electricity carbon neutral while saving money. The University was reaching the maximum capacity of solar generation it could install on-site, and entered into a bundled PPA for both renewable electricity and LGCs, and secured firming services from Origin Energy. It contracted for the total volume of electricity consumed by the University,” says UNSW Energy Manager, Nicholas Jones.

The tripartite agreement – inked between the UNSW, China’s Maoneng and electricity retailer Origin – will see UNSW purchase up to 124,000 MWh of renewable energy per year from Maoneng’s 200 MW Sunraysia Solar Farm near Balranald in southwestern NSW, meeting UNSW’s annual energy requirement starting in 2019. A three year retail firming contract was also signed with Origin to manage the intermittency of solar production.

“This form of PPA is typically called a ‘synthetic’ PPA and is based on a ‘Contract for Difference’ (CfD) structure,” explains Nithin Rajavelu, Partner at Everoze, a technical and commercial energy consultancy specializing in renewables, storage, and flexibility.

This structure defines the relationship between the university and the generator around a ‘strike price’ for the energy generated by the solar park during the day, which means that if the market price is above the strike price for a half hourly settlement period, the generator pays a difference payment to the university, and vice versa if the market price is below the strike price.

“The corporate PPA structure used is quite ingenious where the CfD settlement is performed during the day when the sun is out and the solar plant is generating, and the university buys energy from the retailer during the night time at an agreed tariff price when there is no solar generation,” says Rajavelu, ­describing it as
a win-win case. For the University, this means they are always buying energy at a ‘fixed price’ and also receive LGCs. For the generator, this means they are selling energy at a ‘fixed price,’ which improves the bankability of the project in the eyes of lenders and investors.

At times when the solar farm is not generating, Origin Energy steps in. The backup volumes, which will be provided from alternative sources, have been estimated based on the forecast output from the Solar Farm, historic campus electricity use data, and known future campus use including growth and declines. This arrangement is agreed for only three years.

“The three year duration is so the University can regularly market test the firming supply rates,” Jones of UNSW explains to pv magazine, adding that the solar farm developer will be installing battery storage at the site and UNSW will have an option to take some of the output.

The corporate PPA template is believed to work not only for UNSW, but could also be replicated and tailored to fulfill the specific needs of different energy consumers. While this particular PPA structure is quite unique, the ‘synthetic’ structure is already common in North America and is gaining traction in Europe and elsewhere.

As a gross pool market that uses locational marginal pricing – like the Nordics and the Electric Reliability Council of Texas market – Australia is fertile ground for new PPA structures, notably synthetic deals, ensuring clear transfer of the green certificates to the consumer and a transparent audit trail, which is of special importance for the universities and companies that want to not only claim to go 100% renewables, but 100% solar.

“This is a very interesting structure that both generators and consumers would benefit from taking a look at, to see whether this meets their PPA goals. As with all corporate PPAs, there might be some tricky hurdles to navigate such as delivery guarantees, etc., which may not align with some parties’ risk appetite,” Rajavelu says. He goes on to note that it will be exciting to see how battery storage will be incorporated into corporate PPA structures, to improve the ‘shape’ of generation to match the demand profile, as well as open doors to new and diverse revenue streams.