Growing appetite for commercial solar power purchase agreements could help shape Australia’s renewable energy future

A global rise in the commercial appetite for renewable energy power purchase agreements (PPAs) could herald a shift in the Australian market, a new report form Baker & McKenzie has suggested.

The report, released last Tuesday, indicates a growing number of businesses are now signing long-term PPAs that see them buy renewable electricity directly from independent generators, as well as investing in generation assets instead of buying power direct from utilities.

It found that almost 90 per cent of surveyed corporates, utilities, IPPs and investors said they believed more businesses would enter into PPAs in the next 18 months than in the past 18 months.

Baker & McKenzie partner, Paul Curnow, says this is “good news” for the Australian market going forward, after a prolonged period of uncertainty.

“Unlocking the corporate appetite for renewable energy through corporate PPAs opens up some new market opportunities for Australia,” Curnow said in a statement.

“It provides new customers for renewable energy projects and enables corporate customers to directly access renewable energy sources of their choice that to date they’ve only been able to access through GreenPower.”

Curnow added that corporate PPAs provide contractual price certainty for projects, enabling financing and ultimately implementation. They provide corporate customers with the benefit of reduced and relatively certain electricity prices and a boost to their green and sustainability profiles.

“The traditional market uncertainties as to how aspects of these projects should be structured including accessing and transporting electricity to customers are issues that are now being addressed by key stakeholders including regulators.

“Addressing these factors will continue to help unlock Australia’s renewable energy project pipeline, which includes 1000s of megawatts of new wind and solar projects across the country.” Mr Curnow said.

You can download the Baker & McKenzie report, “The rise of corporate PPAs – A new driver for renewables,” here.

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