Proof of C&I energy savings is in the PPA


Beyond Mars, beyond Coca-Cola Amatil, a core of Australian commercial and industrial energy customers with annual energy use of more than 100 MWh per year has been struggling to reduce costs around soaring energy bills. After 14 months of delivering long-term corporate renewable-energy power-purchase agreements (PPAs) to customers such as agribusiness Olam, machine-tool manufacturer ANCA and Pernod Ricard Winemakers, Flow Power has calculated energy-bill savings across its PPA customer portfolio at $14 million.

“The figure takes into account large-scale generation certificates (LGCs), RERT payments made and wholesale spot-price exposure, reflecting how we’re able to bundle all the traditional benefits of a PPA into a single offering,” Flow Power CEO Matthew van der Linden told pv magazine yesterday.

It’s taken a lot of legwork on behalf of the innovative retailer, which started its market-disruptive operations in 2008 and added renewable-energy PPAs to its offering at the very end of 2017, to get to this point.

Olam Orchards Australia was among the first to sign a long-term PPA through Flow Power with Ararat Wind Farm, which it uses to offset electricity consumption from the grid. Its energy consumption encompasses every step of agriculture from irrigation to processing of crops such as almonds, cotton and cocoa.

A more recent Flow Power sign-up, Pernod Ricard Winemakers, has committed to running its Australian operations 100% on renewable energy by mid-2019 when its own 2.8 MW solar installation at the Barossa Valley Winery comes online. The project, although large, will account for around 20% of Pernod Ricard’s energy use. To achieve 100%, the company has also signed a 10-year PPA through Flow Power to connect to offsite wind and solar farms.

Offering a service which encompasses assessment of a business’s energy needs, implementation of demand response to take advantage of cheaper periods in wholesale energy-market rates, and integration of renewable-energy PPAs to suit each business has been part of Flow Power’s strategy for reducing legwork on the part of the customer to negotiate energy markets for reduced rates.

Hand in hand with easing the burden of choice and complexity is Flow Power’s commitment to transparency in its market assessments, which ultimately enable customers to manage their own energy consumption and purchase.

Electricity prices and manufacturing’s competitive edge

Chris Hegarty, CEO of ANCA Machines, a manufacturer of CNC machine tools, grinders and motion-control systems, says, “Advanced manufacturing in Australia is a global race with product cost being a key factor.” The price of electricity that powers ANCA’s energy-intensive processes influences its competitive edge.

ANCA Machines is now saving thousands of dollars a year with its 10-year Flow Power renewable-energy PPA, and meeting its sustainability goals. Says Hegarty, “Flow Power was more transparent on costs, came out as far cheaper than the quotes we sourced from traditional energy providers and is sourced from 100% renewable.”

Flow Power has signed offtake agreements for 445 MW of renewable energy from 10 renewable energy developments and its portfolio offers PPAs with wind and solar farms — one of each in the five mainland states that participate in Australia’s National Electricity Market (NEM).

So far it has allocated 204 MW to commercial, industrial and agri businesses throughout the country. It estimates its remaining 241 MW could power more than 200 C&I businesses for the coming ten years.

PPAs help solar farms get off the ground

Flow Power recently joined solar-farm developer BayWa r.e. in celebrating the opening of Karadoc Solar Farm in northern Victoria. The electricity retailer last year signed a 10-year, 20 MW offtake agreement with Karadoc to supply local businesses with renewable energy, which effectively helped to ensure financing of the 112 MW plant.

At the time, Director of BayWa r.e. Solar Projects, Daniel Parsons, said, “PPAs are fundamental to the success of solar energy projects of this scale. We’re very pleased to find a partner in Flow Power, who, in a restricted PPA market will help us to bring renewable energy to businesses of all sizes.”

Van der Linden says, “Until recently, PPAs have served as financial tools,” referring to their use as market derivatives. “We knew there was untapped demand in the commercial and industrial sector for corporate renewable PPAs as tools to secure long-term, low-cost generation directly from generators.”

C&I energy consumers are gradually becoming aware of the benefits of transitioning to renewables, says Van der Linden: “One of our customers first signed onto a three-month rolling wholesale agreement; slowly we added demand response into the equation and last year, they entered a corporate renewable PPA blending wind and solar generation.”

He expects the remaining generation from Flow Power’s current offtake agreements with wind and solar generators could sell through by the end of June this year, and says, “We’ve recently increased the size of our engineering team to offer customers additional services.” 

Read more about Australia’s maturing and innovative PPA landscape in the April print edition of pv magazine.

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