Coles inks PPA to source power from three NSW solar farms

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Australian supermarket behemoth Coles will procure power from three utility-scale solar projects developed by Terrain Solar and to be built and operated by Greek EPC Metka EGN. Under the 10-year power purchase agreement (PPA), Coles will purchase more than 70% of more than 220 GWh of clean power generated by the plants annually which will cover 10% of the retailer’s national electricity usage.

Earlier this year, the London-based EPC contractor, which operates as a subsidiary of Greek industrial conglomerate Mytilineos Holdings S.A. announced its foray into the Australian solar market with the acquisition of a 260 MW portfolio . The portfolio comprises six projects located in New South Wales and Queensland, each between 30 and 50 MW once constructed. Without naming the developer, Metka said that project development was well-advanced with 169 MW of projects and construction was expected to begin by the end of 2019.

According to Coles, construction on the projects located outside the regional centres of Wagga Wagga, Corowa and Junee is scheduled to begin as soon as next month. The plants are expected to commence supplying power to the grid by July 2020, and support more than 250 jobs in regional NSW, including over 240 during construction and 10 ongoing roles.“Terrain Solar is incredibly proud of this landmark agreement that will underpin the construction of three new renewable energy plants in regional New South Wales” said Terrain chairman David Griffin.

For the retailer, the increased use of renewable energy is a major part of its commitment to be the most sustainable supermarket in Australia.“We are thrilled that with this agreement, Coles can make a significant contribution to the growth of renewable energy supply in Australia, as well as to the communities we serve,” Coles Group CEO Steven Cain said. “Over the past two financial years alone we have invested more than $40 million in energy efficiency measures including upgrading all store lighting to LED by the end of 2019 and the installation of solar panels on 30 stores.”

Touted as the first major Australian retailer to commit to buying renewable energy through a PPA, Coles is also working with property partners to increase on-site generation of renewable power at stores and distribution centres. “We plan to install solar panels on another 38 stores this financial year and we will be working with our landlords and property developers to identify further locations suitable for on-site solar power generation,” Coles Chief Property and Export Officer Thinus Keeve said.

The rise of corporate PPAs 

The news of the corporate solar PPA in Australia comes hot off the heels of Molycop Australia’s long-term offtake deal for 100,000 MWh of solar and wind power inked with electricity retailer Flow Power. This week’s deals join the growing pool of corporate PPAs in Australia, including the largest solar PPA to date contracting for 88 MW inked by steel giant Bluescope Steel with ESCO Pacific to cover 20% of its electricity requirements over seven years from NSW’s Finley Solar Project. Other notable corporate PPAs were signed by Simec Zen Energy, Australian brewer CUB, and University of New South Wales, which is seeking to become 100% solar powered.

To meet the growing demand from Australian companies which are starting to see bottom line benefits of renewable energy, innovative PPAs and services for C&I customers have emerged at pace with a number of flexible new solar PV contract models and services on offer. One of the new corporate PPA vehicles is Australia’s first ever marketplace to connect buyers and developers – the Business Renewables Centre of Australia, which launched its online members’ portal in March with 7 GW of solar and wind on offer.

Saving on electricity bills is one of the key drivers for Australian commercial and industrial energy customers with annual energy use of more than 100 MWh per year to negotiate a renewable energy PPA. As shown by the figures commercial electricity retailer Flow Power revealed in May, its high-use energy customers collectively saved $15.4 million sourcing electricity from 254 MW of committed  projects in its 440 MW renewable portfolio.

Knowing that “a well negotiated PPA can potentially provide savings between 15 and 47% on the energy component of a typical electricity bill expected in 2020”, a growing number of Australian companies are eager to make the switch. Globally, corporate clean energy PPAs are tipped to smash the last year’s record. Till July this year, PPAs were signed for 8.6 GW of clean energy, with the U.S. making up 69% of the deals – according to BloombergNEF’s H2 corporate energy market outlook report.

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