Procurement Australia’s expanding Power Purchase Agreement portfolio

Procurement Australia is committed to securing sustainable energy outcomes for all our members, both now and in the future. As one of the largest aggregators in Australia, we’re proud to be renowned for our ability to find the answers to difficult procurement questions and requirements. 

This dedication and depth of market understanding has been demonstrated in Victoria through a mutually beneficial energy contract between Procurement Australia and Alinta Energy. The 10-year Power Purchase Agreement (PPA) with Alinta Energy allows participating members to secure renewable energy to assist them with their sustainability agendas and individual renewable energy requirements. 

Procurement Australia has now progressed an additional PPA in New South Wales. The process to date has achieved binding commitment from a cohort of seven councils across the state in readiness for industry consultation and product build in the coming months. This will be followed by a request for tender stage in the first quarter of 2022.

This historic tender process in New South Wales will deliver committed members with their 100% renewable energy requirements via a phased and flexible commencement date commencing in January 2023. Similar to the Victorian PPA, the resulting contract period is envisaged to be between seven and twelve years. This NSW PPA further cements Procurement Australia’s commitment to provide our members Australia-wide with reliable energy that drives them towards their organisational renewable energy goals.

Finding energy solutions that work for everyone can seem an insurmountable task, especially in an increasingly volatile market. With our growing energy retailer relationships and commitment to service our members’ ranging renewable energy needs around Australia, we’re taking a new approach to large-scale, renewable energy supply.

We are proud to be able to extend the Victorian and New South Wales PPA solutions to all our members in these states. 

How our two PPAs work

Power purchase agreements (PPAs) are an increasingly popular and effective alternative to short-term standard electricity retail contracts. They are also notoriously difficult to engineer, despite the often overwhelming positive outcomes. 

When constructed correctly, they can provide long-term energy price visibility and transparency, reduced energy price volatility risk and allow for alignment with larger renewable energy generating assets.

Procurement Australia’s successful establishment of the Victorian PPA and achievement of binding commitment of participating members in New South Wales, all of which have varying energy requirements speaks to the underlying rigour of our process and comparable strength of the end product in an increasingly complex marketplace. Given the regular volatility and unpredictability of the longer-term energy supply around the nation, security and confidence in these agreements is everything. 

What are the benefits of these PPAs?

From the beginning, our focus for both PPAs wasn’t on delivering surface level ‘green’ solutions. We have worked to achieve a reputable and replicable PPA structure that delivers the stated renewable commitments in both states in a way that is clear, consistent, targeted, and transparent for all members.

Overall, the two active PPAs have and will deliver: 

Procurement Australia: New South Wales PPA

Procurement Australia’s latest PPA in New South Wales has successfully achieved the minimum viable number of participants and volume of energy to progress to the market via a public tender. 

This PPA expands on the already overwhelming success of the Victorian PPA in partnership with Alinta Energy.  

Which NSW councils and authorities have signed on?

Procurement Australia is thrilled to have the following seven councils already onboard as part of our latest PPA. Our founding members of the NSW PPA include Albury City Council, Bega Valley Shire Council, Camden Council, Queanbeyan-Palerang Regional Council, Penrith City Council, Wingecarribee Shire Council and Wollongong City Council. 

We’re delighted to have this diverse range of council members with us as part of this historic process in New South Wales.  

What’s next for the New South Wales PPA?

Our dedicated Strategic Sourcing team has already proven experience generating lasting energy results through our Victorian PPA via the solution provided via the Bald Hills Wind Farm in Gippsland. 

The next steps with our NSW PPA is to undertake industry consultation and engagement in readiness for the go to market via public tender stage to secure an energy supplier to meet the specific renewable energy requirements of our participants. 

We are committed to ensuring that we support our seven NSW participants with their individual renewable energy requirements. We are also dedicated to assisting other councils and authorities to meet their own renewable energy targets.  

Procurement Australia: Victorian PPA

Under this 10-year PPA, 13 Victorian councils and 1 State Government Authority now have the means to meet their individual sustainability and renewable energy goals commencing from 1 July 2020.

This PPA allows Victorian councils and authorities to take advantage of increased certainty in their management of energy use and costs, both immediately and throughout the decade to 2030. 

Thanks to the contract between Procurement Australia, its members and Alinta Energy, the PPA allows for these councils, authorities and those they serve to feel secure and confident that their individual energy requirements have been heard, and are being met. 

This agreement is testament to the capability of our Strategic Sourcing team, and is representative of the confidence our members have in our ability to remove unnecessary complexity around a complex product, while still maintaining the quality and assurance of the solution.

What is the agreement between Procurement Australia and Alinta Energy?

The PPA is a Victorian-based agreement. Procurement Australia members who signed on to this PPA can set their renewable energy targets and energy strategy that works for them and have this delivered by Alinta Energy, at long-term competitive rates.

The level of voluntary Large Scale Generation Certificates sourced by each member via this PPA is at the discretion of each member to cater for their individual renewable energy requirements which is a major positive and value add provided by both Procurement Australia and Alinta Energy. 

This agreement is representative of the confidence our members have in Procurement Australia to remove unnecessary complexity around a complex product while still maintaining the quality and assurance of the solution.  

Which Victorian councils and authorities have signed on?

These PPA agreements are a historic achievement – we believe it is the largest, cross-council PPA with this many participants.  

Our Solution:

*Tick = Public Sector Tendered Solution

JUST THE BEGINNING
The successful delivery in Victoria and progression in New South Wales of these two renewables-focused PPAs is just the start. Procurement Australia has its sights on securing more PPAs throughout other states and territories around Australia.
STRATEGIC SOURCING TEAM
The successful delivery in Victoria and progression in New South Wales of these two renewables-focused PPAs is just the start. Procurement Australia has its sights on securing more PPAs throughout other states and territories around Australia.
MORE PPA AGREEMENTS COMING
While this significant milestone will support members for an entire decade, there’s still more work to be done. Procurement Australia has its sights on securing more PPAs throughout other states and territories around Australia.
BE READY FOR THE NEXT ITERATION
Power purchase agreements can help Australia to become a leader in the fight for a renewable energy future. Individual councils, authorities and businesses all have a part to play to reach national targets and secure a greater renewable option.
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