Energy buyers flex sustainable credentials
Nearly 800 MW of renewable electricity generation was contracted in 2021.
Strong demand for renewable power purchase agreements has been driven by consumers’ growing appetite for sustainability, according to a new report.
The Business Renewables Centre’s annual State of the Market found that demand for renewable power purchase agreements remained strong in 2021, despite concerns that Covid-19 and low wholesale energy prices could slow uptake.
This type of corporate agreement has become a core mechanism to develop new large-scale renewable projects, now that the Renewable Energy Target has been exhausted.
In 2018, ARENA supported the rollout of the Business Renewables Centre Australia’s information hub and marketplace, which set out to link commercial energy users with renewable energy developers.
Since its launch, the BRC-A has contracted more than 4 GW of renewable generation across 110 separate agreements.
Responding to the new State of the Market report, the Business Renewables Centre’s technical director Dr Chris Briggs said there was optimism that new commitments to renewable energy zones could have a positive impact on corporate power purchase agreements.
There have been questions as to whether the REZs might ‘crowd out’ corporate PPAs. However, around 60% of developers and 70% of service providers expect the REZs to increase corporate PPAs,” Dr Briggs said.
The Business Renewables Centre initiative was led by Climate-KIC Australia, the World Wildlife Fund Australia and the Institute for Sustainable Futures at the University of Technology Sydney, building on the WWF’s existing renewable energy buyers forum.
Buyers want renewable electricity
The Business Renewables Centre undertakes an annual survey of market participants, this year finding that buyers are becoming more motivated to bolster their sustainable credentials.
Acknowledging that low wholesale prices have slowed demand for renewable agreements amongst some electricity users, almost two-thirds of buyers nominated sustainability and other “non-price” drivers as the reason for their interest in renewable energy supply agreements.
The Centre is supported by some of Australia’s biggest brands, with supermarket chains Aldi and Woolworths, the ANZ and Commonwealth banks and global furniture giant IKEA amongst its founding members.
ARENA CEO said the new State of the Market report shows the value of the services offered by the Business Renewables Centre.
“Renewable energy offers a way for commercial energy users to save money and reduce emissions, but often businesses and councils need some support to take that first step,” Mr Miller said.
The Business Renewables Centre Australia is modelled on the Rocky Mountain Institute’s model, which aims to help companies to procure 60 GW of renewable energy by 2030. Since its launch in 2015, the Rocky Mountain Institute’s BRC has helped more than 200 companies to complete more than 7000 MW of renewable energy deals.
“Strong demand this year for renewable agreements shows they make sense for many commercial energy users, with companies also rewarded for demonstrating sustainable credentials,” he said.
Read more about the Business Renewables Centre.