In Times of Australian Electricity Price Volatility, Renewables Prevail

April 3, 2018 Jenna Bieller

In Times of Australian Power Price Volatility, Renewables Prevail

A “perfect storm” of energy-impacting measures in Australia—including the rapid closures of two baseload, coal-fired power plants, an increase in the price of Large-scale Generation Certificates (LGCs), and shifts in dispatchable electricity due to over-exported liquid natural gas—have caused wholesale electricity prices throughout the National Electricity Market to surge, as much as tripling in some areas. This has left companies struggling to manage their energy budgets and looking for alternatives in renewable energy.

Globally, companies are finding economic relief and price stability in wind and solar Power Purchase Agreements (PPAs), which are driving dramatic corporate engagement on renewables in the U.S., Mexico, India and parts of Europe. Nearly 700 MW of corporate PPAs have already been signed and announced in Australia, with demand expected to peak over the next several years.

Dramatically falling prices driven by technology advances and increasing demand are fueling the corporate renewables rush. In a PPA, companies can contract directly for clean energy with a renewable electricity generator, locking in a low, fixed-price for electricity over the life of the agreement.

In Australia, PPAs have the potential save organizations between 10% and 50% on their electricity and LGC costs. The clean generation also allows companies to realize their renewable energy procurement or carbon reduction goals.

PPAs also allow companies to lock in a low, fixed price for electricity, helping to stabilize energy budgets at a time when energy prices are surging and highly volatile.

Now is the opportune time for companies with Australian energy load to explore renewable PPAs. The current cost savings available—particularly when combined with forecasts for additional coal-fired retirement and inevitable pressure to achieve renewable energy or carbon reduction goals—makes PPAs one of the most attractive instruments in the Australian market.

To meet the increasing Australian demand, Schneider Electric has expanded our renewable & cleantech advisory services to the Australian market. These services will include strategic project sourcing, negotiation and execution, including consultation on club-type, or aggregated, PPA purchasing.

Australian companies will also be able to take advantage of our NEO Network™. First launched in North America in 2016, the NEO Network platform is a growing community of forward-thinking corporations committed to buying and developing renewable energy and clean technology solutions around the world. More than 15 global companies with Australian footprints are already active on the platform.

For a deeper dive into the Australian market opportunity, we invite you to download our Australia Market Report. To receive a NEO Network demonstration, please contact us

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