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Corporate demand in Australia for green energy expected to hit record level in 2020

December 03, 2020

Renew Economy:

2020 is expected to be a record year for corporate renewable energy Power Purchase Agreements (PPAs) in Australia with governments and businesses investing $AU2.4 billion and buying over 1GW through the year.

The Business Renewable Centre Australia (BRC-A) latest annual State of the Market report says the recent growth of renewable PPAs in Australia is “one of the major changes to the market for large-scale renewable energy” in the country.

According to the BRC-A, since 2017 there have been 79 corporate PPAs negotiated in Australia, contracting 3GW of renewable energy generation, with over half being negotiated with new solar and wind farms. It’s played a key role in packing up the slack created by the federal governments decision to not extend the renewable energy target. The report identified over 1GW of renewable PPAs signed in 2020 as of the middle of November, led by state and local governments, and companies.

NSW still trails Victoria for corporate PPAs overall, but that may not last long considering how little Victoria signed during 2019-20 and how much New South Wales signed, and its plans to sign under its renewable transition roadmap (12GW by 2030). Queensland signed the second most amount of corporate PPAs in the 2019-20 financial year.

Through PPAs, governments and businesses contract to buy electricity and/or green certificates from renewable energy projects at an agreed price. Other than securing renewable electricity supply, PPAs also serve as a way to hedge against electricity costs while also providing renewable energy projects with revenue certainty, which helps land cheaper finance.

[Joshua S Hill]

More: Corporate demand for wind and solar hits record level of $2.4bn in 2020

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