Australia’s journey to decarbonisation with clean energy power purchase agreements and innovative technology
Clean Energy PPAs are currently one of the fastest decarbonisation methods used by companies today.
Scope 2 emissions are typically tackled first as a part of a business’ decarbonisation journey through long term renewable power purchase agreements (PPA). PPAs are a mechanism through which a company purchases electricity from a renewable source, such as a wind farm, hydroelectric facility, or solar plant.
The energy user enters into a long-term agreement at prices that are close to the build cost of these mature technologies and are not subject to volatile market movements. In return, infrastructure developers and investors get the funding and certainty they require to finance the project.
PPAs for organisations of any size
Stockyard Hill Wind Farm west of Ballarat in Victoria is an example of a renewable energy project that has seen the benefits of clean energy power purchase agreements.
The 530MW facility, whose output is contracted to Origin Energy, has signed a long-term PPA agreement with assets owned by IFM Investors and QIC with the deal being structured by Renewable Energy Hub. This demonstrates that the decarbonisation of Australian infrastructure such as: airports, ports, energy facilities, roads and hospitals can be supported by renewable energy projects.
The scenario above is a large-scale example, but even corporates with more moderate energy needs can benefit from clean energy PPAs.
This is one of the real trends we’re seeing evolve – smaller buyers binding together in a PPA arrangement that lets them achieve economies of scale that would not be possible for each entity on its own.
The role of technology in decarbonisation
The decarbonisation of Australia by 2050 is also built on technology innovation.
At Renewable Energy Hub, we have launched our CORE Markets software platform to improve transparency and remove the barriers of entry to the carbon markets.
CORE Markets provides access to spot and forward contracts in carbon and electricity markets across a new suite of clean energy products developed by Renewable Energy Hub, and a full complement of carbon credits and environmental market certificates – creating a key tool for wholesale market proponents, project developers and end users.
The data and insights on price, co-benefits visibility and benchmarking is supported by Renewable Energy Hub’s market leading advisory and transactions team.
Slowing down global warming
Global warming is expected to reach 1.5 degrees in the next decade (source: ipcc.ch). Corporate decarbonisation targets must include tangible action today.
Within Australia, certain sectors and companies have more work to do than others when it comes to the decarbonisation process. However this hasn’t stopped many of Australia’s largest carbon emitters from setting ambitious targets of net-zero by 2030 and lower.
One strategy to speed by Australia’s journey of decarbonization is to engage all stakeholders and increase the transparency of many carbon project co-benefits.
An example of carbon project co-benefits is increased biodiversity in a specific region. This increased biodiversity can be used to maintain a habitat for indigenous species of plants or animals, as well as, create employment, education and training opportunities for people working in these areas.
At Renewable Energy Hub, we aim to facilitate a sustainable and transparent carbon market by matching the supply of carbon credits with the demand and investment opportunities to ensure that projects are being rewarded appropriately based on the co-benefits they deliver.
This is where the latest benchmarking feature of CORE Markets comes in: Carbon Curves. It is used to assist users in evaluating global carbon price movements. Carbon Curves has been developed to provide market participants greater clarity and insights into carbon unit prices and valuation of broader project characteristics and co-benefits. A first of its kind for the ACCU market
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