A growing number of businesses are doing just that, through what’s called a corporate renewable power purchase agreement (PPA). The model is simple: agree to purchase a portion of the output from a renewable energy generator, like a wind or solar farm, for ten years or more, and enjoy a fixed low price for power.
Melbourne-based energy retailer and TAKE2 member Flow Power is the first in Australia to offer businesses access to corporate PPAs. Recently, they announced a supply deal with the Ararat wind farm in Victoria.
Flow Power's Managing Director, Matthew van der Linden said corporate PPAs are already hugely popular overseas.
“Companies like Google and Amazon recognise the fact that these arrangements offer price security.
“It’s a simple case of consumer-driven demand. We expect other retailers to enter the market with similar offers soon.”
How it works
Renewable energy is actually very cheap to produce. In fact, it can cost up to half of what users pay in the wholesale electricity market.
“Currently retailers are locking in these low costs and benefitting from the higher market prices,” Matthew said. “By agreeing to buy power direct from the plant through a corporate PPA, a business can make sure they only pay the low cost of generation.”
Matthew believes that Flow Power is efficient and cost-effective. “Incorporating a corporate PPA into a normal fixed rate model doesn’t really work, however with a wholesale solution, businesses have the flexibility to make the most of low cost power, while sourcing the remaining power from the market.”
At the same time, the introduction of PPAs to the market encourages further investment in renewable energy, which is great news for our climate.
Who can benefit
Businesses that use more than one gigawatt hour per year are ideally suited to corporate PPAs. “That could include a factory, farm, or even a printing business,” Matthew said.
“Most businesses buy between 30-50% of their power through a Corporate PPA and the rest comes from the wholesale market. While we have a range of tools that keep costs down when the sun isn’t shining or the wind isn’t blowing, we aim to get our customers the most benefit out of their agreement.
“Powering your business through a PPA is no different than any other electricity supply contract – that’s why we call it wind minus the turbines!”
If you’d like to lower your power bills, contact Flow Power for more information. You’ll be joining other TAKE2 members that are making the switch to renewable energy.