Victorian dairy producer signs 10-year wind farm PPA

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Gippsland dairy producer Burra Foods signs 10-year PPA with Flow Power to source electricity from Ararat Wind farm – a deal that’s expected to cut its electricity costs by 20%.

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Burra Foods factory in Gippsland
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One Step Off The Grid

Ararat Wind Farm. Source: Ararat Wind Farm

Victorian dairy producer Burra Foods will soon get a portion of its energy needs from cheap Australian wind energy, after signing a 10-year power purchase agreement to source electricity from the Ararat Wind Farm, also located in Victoria.

The deal was signed with Melbourne-based energy retailer Flow Power, which last September inked its own deal with the 240MW Ararat wind farm, allowing its business customers to access a renewables electricity supply that was “significantly cheaper” than power from the grid.

At the time, Flow Power founder and managing director Matthew van der Linden said the “first-of-its-kind” deal – to buy 50MW of the wind farm’s output for 10 years – would enable customers to “take a chunk of that farm as though the wind turbine was on their site.”

As well as being a better environmental option than power from the grid, van der Linden said it meant that businesses could access power at less than $10/kWh, a significant discount on what they were paying now.

“That is a game changer for businesses …. and could be the difference between business customers going broke and customers being able to operate,” he said in September.

For Burra Foods, which is based in Gippsland, the PPA is expected to deliver annual electricity savings in excess of 20 per cent and can be used in real time to offset grid electricity consumption.

For a company that, during peak periods, processes up to 1.5 million litres of fresh farm milk a day, that sort of energy cost saving and price certainty is nothing to be sneezed at.

According to a December 2017 Burra Foods Community Report, the company’s combined electricity and gas bill has increased by almost $4 million a year from 2016 to 2018.

Burra Foods factory in Gippsland

The company – which specialises in removing the water from milk to make it a “value-added ingredients” – has been working with Sustainability Victoria in an effort to work out how to better manage supply for the energy intensive business.

Burra said in December that solar, wind, gas tri-generation, renewable energy fed boilers and other options were all being evaluated for an investment decision during 2018.

The company has also installed 100kW of solar panels on available roof space – a project completed by local outfit Energis in September 2017, and delivering around 2.4 per cent of Burra’s electricity needs.

“Initially we have chosen to feed the solar power into our electrical supply to use it within the factory; however, it is only a matter of time before we adopt battery storage to get better value from our own power generation,” the newsletter said.

The addition of the wind energy PPA not only further reins in the company’s energy costs, but puts it a major step closer to meeting its green goals.

“As a business, Burra Foods has very bold sustainability targets and we have invested heavily in renewable energy solutions that fit our usage demand,” said Stewart Carson, the company’s general manager of supply chain and manufacturing.

“Partnering with Flow Power and sourcing a steady supply of clean, renewable energy is a major step toward our facility being powered by 100 percent renewable energy. We remain committed to playing our part in sustainable dairy manufacturing.”

Flow, meanwhile, expects the deal with Burra to be one of many more.

Alongside Burra Foods, the retailer has also signed ANCA – a market leader in the manufacture of computing machinery and systems, up to its Ararat Wind Farm Renewable Corporate Power Purchase Agreement; as well as the Australian arm of global agribusiness group, Olam.

Beyond Ararat, Flow has plans to contract up to 1000MW in corporate renewable PPAs in Australia, an initiative is says will likely underwrite new wind and solar farms.

“We look forward to working with Burra Foods and are pleased to welcome them as a customer,” van der Linden said in comments this week.

“Traditionally, the dairy industry is a heavy power user that requires a significant amount of power at all stages of the supply chain.

“This agreement will deliver secure cost-efficient power for a long-term, without compromising on Burra Foods’ sustainability goals.

“Above all else, Australia’s dairy industry needs cost-effective sustainable energy. PPAs deliver this.”

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.

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1 Comment
  1. Greg Hudson 11 months ago

    ”As well as being a better environmental option than power from the grid, van der Linden said it meant that businesses could access power at less than $10/kWh, a significant discount on what they were paying now.”
    Surely this is a typo? $10/MWh would be more likely wouldn’t it ?

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