SEVEN TAKEAWAYS YOU MAY HAVE MISSED FROM THE STATE OF THE MARKET 2019 REPORT
Corporate Renewable Power Purchase Agreements (PPAs) have rapidly emerged as an important segment of Australia’s large-scale renewable energy market, and are now crucial in driving Australia’s energy transition.
The Business Renewables Centre-Australia (BRC-A) has been pivotal in facilitating the growth of PPAs, by making this complex market environment easier to understand, and educating the private sector about potential benefits and value. In just one year, the BRC-A has grown to support over 240 member organisations, held sold-out PPA training bootcamps in Sydney and Melbourne, and will expand to Queensland in 2020.
Over the last two years, the landscape of renewable energy in Australia has changed drastically., which coincides with the BRC-A first anniversary, provides an overview of the sector and its key trends. Here are seven takeaways from the report you may have missed:
1. Since 2016, 58 Corporate PPAs involving 70 organisations totalling 2.3GW of contracted capacity have been procured - that’s enough to power about 1.3 million homes. Over 60 per cent of Corporate PPAs have been with new solar and wind farms.
2. Renewables now make up more than one fifth of Australia’s total energy output and are the cheapest form of new build electricity generation. Corporate PPAs have emerged as an important new segment for building out Australia’s large-scale renewable energy market in a short time with the market poised further growth.
3. PPAs aren’t just for big corporates. PPAs have been signed in a wide range of sectors, including manufacturing, local councils, universities, utilities and state governments as well as small- or mid-sized buyers such as schools, vineyards and even the Sydney Opera House.
4. BRC-A members are motivated by four key drivers:
- Achieving ambitious sustainability targets such as RE100 and Science-Based Targets Initiative,
- Managing price volatility in the energy market,
- Energy cost savings: High prices have often been the catalyst for more proactive energy management, and
- Improving brand or social licence by supporting new renewable energy.
5. There is ongoing innovation in the market. The growth of Corporate PPAs has quickly diversified the large-scale renewable energy market; not long ago, the only option effectively was ‘wholesale’ PPAs with utility retailers, and now we are seeing retail PPAs enable mid-scale buyer participation.
6. The average size of a Corporate PPA is just under 44MW which could power 25,000 houses. Around one-third of deals are greater than 50MW, almost half are 20-50MW and around 10 per cent are smaller than 10MW.
7. What are the key identified barriers to corporate PPAs? Lack of buyer understanding ranks as the top issue. The BRC-A aims to help make this complex market environment more navigable, and educate the private and public sector about the value which can be realised.
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BRC-A is a collaboration between WWF-Australia, Climate-KIC Australia and the University of Technology Sydney’s Institute for Sustainable Futures, and is supported by funding from the Australian Renewable Energy Agency (ARENA) and the NSW and Victorian Governments.