The power of partnerships and wind
Major global events have increased the profile of environmental issues in business.
The United Nations Sustainable Development Goals have been launched; boards are acknowledging their fiduciary duties to disclose climate-related risk; and the Paris Agreement has been ratified, to cite just three.
The Paris Agreement has generated a ripple effect and now individual countries, sectors and organisations have announced their own aspirations to contribute to the global 2°C goal.
“The project will provide significant environmental benefits and substantial support to the local community and regional economy.” – Rebbeck
Environmental markets are also impacting companies’ bottom line while barely a day goes by without Australian mainstream media discussing the domestic energy market.
Australian electricity spot prices have tripled since December 2016 with volatility remaining prevalent due to factors like major coal-fired generators closing and ongoing policy uncertainty.
So how do organisations achieve energy affordability in increasingly volatile markets while delivering environmental agendas?
ANZ, Coca Cola Amatil, Telstra and University of Melbourne collaborated to solve this very problem through a renewable energy power purchase agreement (PPA).
The PPA focuses on the Murra Warra Wind Farm, located near Horsham in North West Victoria.
An electricity supply contract between a renewables project and an energy buyer, a PPA typically has a long contract term of around six to 12 or more years. They require an upfront agreement on the cost of electricity and/or green products for the life of the contract.
As a result, a PPA can generate substantial energy cost savings whilst delivering new and additional renewable energy onto the grid.
“Environmental sustainability is a major focus area for ANZ and we are committed to being in line with the global 2°C goal, increasing our renewable energy consumption and maintaining Net Zero Carbon,” Kate Langan, ANZ GM Group Property says.
“The PPA delivers positive social and environmental impact and has a potential to save us $A16 million in future energy costs.”
The companies involved announced the execution of bilateral PPAs with the Murra Warra Wind Farm in late 2017 with successful financial close announced in early 2018.
The organisational PPA journey is best summarised as a four step process.
Originally Published by ANZ Bluenotes, view full article here.