Renewable energy is electricity produced from renewable resources such as solar, wind and hydro. It does not involve the burning of fossil fuels.
What are the benefits for my business?
More and more businesses are turning to renewable energy for a variety of potential benefits including:
- Lower power prices
- Long term price certainty
- Taking control of power supply, such as generating power on-site
- Supporting projects to create new renewable generation
- Supporting carbon neutral marketing of your business
The best way to procure renewable energy will depend a lot on your business objectives, size and risk tolerance.
Some businesses may want to maximise their own energy generation capacity and maximise rooftop solar to reduce their energy bill. Others might want to drive new large scale renewables generation to displace fossil fuels from the grid.
Renewable energy is a constantly evolving space. The list of options below is not definitive but may assist you in working out the best option.
Installed rooftop solar in Victoria for business is estimated to cost 12c-15c kWh over the life of the system, as per the Australian Energy Council solar report Q3 2019. This is well below the current market price of electricity.
A solar system should have a lifespan of 20+ years with general paybacks of less than 10 years, depending on your site. For tenants it is worth discussing the potential for solar with your landlord.
Wind turbines are not a viable option in inner city areas such as Yarra, primarily due to the lack of consistent and strong wind, but also due to noise and safety issues in built up areas.
Smart grid connected battery storage technology is developing rapidly, as are the uses for commercial batteries. If this is of interest please speak with an energy advisor, such as Yarra Energy Foundation, about what would work best for you.
The three primary sources of renewable generation in the grid are wind, solar and hydro.
Specifically purchasing renewable electricity from any of these sources may require a contract. Most businesses who want 100% renewable energy need to purchase their energy from a renewable generation source.
There are two primary approaches to purchasing off-site renewable energy:
- A simple process to take up existing renewable energy offers from retailers, and
- A more complex Power Purchase Agreement (PPA), which is generally a longer term commercial contract between multiple partners. It can have a range of terms and conditions to specifically suit the needs of the business.
Signing up to a renewable energy retailer offer
Many retailers offer an option to purchase a certain percentage of renewable energy within their standard mix of energy plans.
GreenPower is a federal government renewable energy accreditation scheme that is regarded as the most reputable source of renewable energy. Most electricity retailers offer accredited GreenPower.
When you choose GreenPower your electricity retailer purchases the equivalent amount of renewable energy.
You pay a premium for the electricity you buy as GreenPower. This premium, along with the wholesale electricity cost of the electricity you use, goes toward investment in renewable energy.
You can compare contracts and offers at Victorian Energy Compare.
Power Purchase Agreements (PPA)
What is it?
A long-term agreement to purchase renewable energy. The contract is held with a retailer or with a retailer and a generator via a tri-partite agreement.
Who is it for?
Whilst aimed at large electricity users, the retail PPA market offers a large variety of options and contracts.
All energy users with a commercial meter can access the market, and get access to affordable renewable energy.
What are the energy costs?
They vary depending on the project, the contract, the technology and the location.
In addition to pricing, there is potential within a contract agreement to reduce long term price volatility due to the nature of fixed rates.
Although many projects and contracts can deliver initial cost savings, this isn’t guaranteed, as market prices move over time.
Watch a recording of a webinar on PPAs by Yarra City Council and Business Renewables Centre Australia from September 2020.
The Business Renewables Centre-Australia has been established as an independent information hub and membership platform that aims to simplify, streamline and accelerate corporate purchasing of large-scale wind and solar energy and storage.