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Electricity power agreements in the Australian corporate market

December 01, 2019
Clark Butler
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Key Findings

Renewable energy generation is a small percentage of total electricity capacity in Australia’s National Electricity Market (NEM) at just over 2.5%.

The strong growth in renewables - projected to increase by 2-5GW over the next three years - is a key factor supporting the growing financial viability of renewable energy projects in Australia.

With more than 14.5GW of capacity in the pipeline at planning or development stage, there is plenty of opportunity for organisations to enter into project-linked PPAs.

Executive Summary

Renewable power purchase agreements (PPAs) that reduce cost, improve cost certainty, engage staff, help reduce carbon emissions, and support the growing financial viability of renewable energy projects, are increasingly taking off in Australia.

Companies are entering long term contracts – or PPAs - to purchase electricity directly from energy generators/suppliers, which locks in agreed pricing over many years and provides financial certainty to all involved.

PPA growth in Australia has tended to come from the not-for-profit sector – cultural institutions, local government, universities – and the mainstream corporate sector – banking, telecommunications, brewing, and grocery retailing, until recently.

Four years ago, renewable PPAs entered Australia’s electricity market, and with that, a change in the type of industry seeking energy certainty.

This note reviews the growth of renewable PPAs in Australia, including the first renewable PPA to be negotiated with the iconic Sydney Opera House.

Press release: IEEFA Australia: Corporates can save money while supporting growth of renewable energy

Please view full report PDF for references and sources.

Clark Butler

Clark Butler is an IEEFA guest contributor, and a corporate adviser with a background in the technology and finance sectors. In additional to being a director of and investor in technology and data companies, he is exploring technology and financing solutions to encourage investment in renewable energy solutions.

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