ERM seeks wind and solar bids for PPA offering to small business customers | RenewEconomy

ERM seeks wind and solar bids for PPA offering to small business customers

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ERM Power launches new product offering made-to-fit, short-term and flexible contracts between renewable energy developers and corporate energy consumers.

Lincoln Gap wind farm, contracted to ERM.
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Business electricity provider ERM Power is seeking to tap both the boom in large-scale wind and solar farm development, and the growing appetite for cheap renewable power by Australian companies, with a new short-term energy off-take product.

The company this week launched its Corporate Renewable Power Purchase Agreement, with the goal of offering made-to-fit, flexible contracts between renewable energy developers and corporate energy consumers.

This would include giving commercial and industrial energy users the ability to choose their level of buy-in to large-scale renewable energy projects, in increments of just 5 per cent, and for periods of time as short as three years. Most corporate PPAs currently span around 15 years.

ERM Power would handle all “intricacies” of the PPA, including sourcing the project, negotiating the terms and conditions and managing financial settlements.

“This allows commercial and industrial businesses to buy a partial interest in the output of a large renewable power station, to support their business and environmental energy objectives,” said ERM’s head of trading, David Guiver on Tuesday.

“PPAs are an increasingly popular option, but businesses must proceed cautiously if negotiating these directly, as there may be hidden pitfalls.”

Guiver says the main goal of the product was to service those businesses keen to tap renewables, but were perhaps put off by the “intricacies” of negotiating a complex deal directly with a renewable energy provider.

“Our new product helps businesses secure exposure to renewable energy generation as part of their energy mix in a way that’s simple, transparent and efficient.”

As we have reported, ERM has been working away at its corporate renewable PPA strategy for a few years now, after starting 2017 with a slap on the wrist from the Clean Energy Regulator for failing to meet its development commitments under the federal Renewable Energy Target.

Since then, the company has announced various deals to underpin the construction of various renewable energy generation assets in Australia, including the 212MW Lincoln Gap Wind Farm near Port Augusta in South Australia, which just this week exported its first energy to the grid.

In 2017 it also contracted to buy the output of the 57.5MW Hamilton Solar Farm in Queensland coal country – a deal that underscored ERM’s strategy of deciding to play with an “arbitrage” on large scale renewable energy certificates, using a three year “grace period” to bet that LGC prices will fall from their historic highs to more manageable levels.

Corporate power purchase agreements are taking off in Australia, although mostly between major corporations and renewable energy developers, such as the December 2018 deal between CUB and BayWa r.e. to source 90 per cent of the major Australian brewer’s energy needs from the 112MW Karadoc Solar Farm.

Smaller deals are becoming more common, though, through companies like ERM and fellow business retailer Flow Power, which just last week brokered a deal for the NSW Bomen solar farm to supply 69MW of its 120MW generation capacity to two major food and beverage businesses, Australian Vintage and Snack Brands.

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