Massive wind farm contract to help power 46 Victorian councils

Forty-six Victorian councils have banded together to underwrite a massive renewable energy off-take deal, signing up to buy 240GWh of wind power from two major Victorian wind farms through a deal with Snowy Hydro-owned retailer Red Energy.

Led by Darebin City Council in Melbourne’s north, the Victorian Energy Collaboration, or VECO, will purchase enough renewable energy to power 45 per cent of the state’s local government electricity demand with renewables, over a period of 9.5 years, starting 1 July, 2021.

The ground-breaking deal, which has been facilitated by Victorian Greenhouse Alliances, is expected to save Councils up to 35 per cent on their electricity bills, based on current costs and depending on each council’s energy needs.

The renewable energy will be sourced from Tilt Renewables’ 336MW Dundonnell wind farm near Mortlake, which started exporting power to the grid in March 2020, and from the 209MW Murra Warra II wind farm near Horsham, which is owned Partners Group and is expected to be fully operational by June 2022.

Both wind farms had already signed off-take deals with Snowy Hydro, as two of eight wind and solar contracts signed up by Snowy in 2019 for what it said at the time were record low prices, delivering wind power in the range of $40/MWh. It is not known what price Snowy has charged the councils in the secondary deal.

“This is a bold, visionary project that pushes the boundaries of what was thought possible for local government,” said Darebin mayor, councillor Lina Messina.

“There is no box this project doesn’t tick – it tackles climate change, cuts energy bills, invests in Victorian businesses, and grows jobs in regional Victoria.

“By powering our council buildings and streetlights with affordable renewable energy, we’re making ratepayers’ dollars go further. Every dollar we save on energy bills is a dollar we can put towards improving our roads, footpaths, libraries or community programs.”

Indigo Shire mayor, councillor Jenny O’Connor, said the project sent a strong message to the community that the local government was serious about tackling climate change.

“This is a fantastic initiative that will have far reaching benefits, not just for the environment, but also in cost savings for our community,” Cr O’Connor said.

Red Energy, which has its origins in Victoria but is now owned by the federal government-owned Snowy Hydro, said it was excited support Victorian councils, ratepayers and wind farms.

“Our owner Snowy Hydro has been a leader in renewable generation for decades and Red Energy is delighted to partner with Victorian councils to provide a long-term energy contract that will enable councils to purchase renewable energy at a competitive price,” said said Red Energy CEO Iain Graham.

The deal, while the largest of its kind for any one group of councils in Australia, follows a similar effort led by the Melbourne City Council in 2017.

In that case, a consortium of 14 of leading local universities, cultural institutions, corporations and Councils known as the Melbourne Renewable Energy Project, or MREP, signed a deal to buy 88GWh of power from Pacific Hydro’s 80MW Crowlands wind farm, near Ararat.

The hugely successful deal has been followed up in 2019 by a second bulk-buy round, combining the purchasing power of seven large energy users to procure 113GWh of renewable energy generation.

The full list of councils signed up to the VECO deal can be viewed below.