Victorian manufacturer taps cheap renewables in PPA with Flow Power

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Corporate energy retailer Flow Power inks 10-year PPA to supply Melbourne-based manufacturer with electricity sourced from Victoria’s Ararat wind farm.

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Up and comping corporate energy retailer Flow Power has inked a new 10-year deal to supply a Melbourne-based manufacturer with locally generated renewable energy sourced from the Ararat wind farm in Victoria.

In a statement on Tuesday, Flow Power said it had signed ANCA, a market leader in the manufacture of computing machinery and systems, to its Renewable Corporate Power Purchase Agreement, giving it direct and long-term access to clean energy at wholesale prices.

Flow Power’s corporate PPA scheme, designed to give the retailer’s business customers access to significantly discounted electricity supply, was launched in September last year, off the back of a deal with the Ararat wind farm.

The deal gave Flow Power access to up to 50MW of capacity from the 240MW Ararat facility, for terms of around 10 years. And over time the company has plans to to contract up to 1000MW of both wind and solar, an initiative that would likely underwrite new renewable projects.

At the time of the deal, Flow Power founder and managing director Matthew van der Linden said it meant that businesses could access power at less than 10c/kWh, a significant discount on what they are 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.

The deal with ANCA will see the company buy a fixed percentage of wind power directly from Ararat in real time, calculated at 30 minute intervals under a ‘take or pay’ arrangement, meaning that ANCA will only pay for what it uses.

It follows a similar deal just over a week ago with the Australian arm of global agribusiness group, Olam, which Flow Power said could potentially save the company thousands of dollars in energy costs.

In comments on the ANCA agreement on Tuesday, van der Linden described the corporate PPAs as “game changers” for the delivery of power to small to medium business and industry.

“Finally, we’ll begin to see Australia to catch up with other international markets that have proven this model to be a success,” he said.

“Our Renewable Corporate PPAs will open up the market to more Australian businesses and allow them to access lower power prices through agreements that have only previously been available to big corporations with the scale to negotiate one-to- one with large renewable plants.”

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7 Comments
  1. Ian Saunders 2 years ago

    Unfortunately the author does not understand the concept of a ‘take or pay’ contract. ANCA will be paying whether that take the power or not.

    • Ren Stimpy 2 years ago

      “at less than 10c/kWh” who wouldn’t?

    • John Saint-Smith 2 years ago

      I fail to see the problem in that light. Like any electrical service, you need to pay for the provision of the service you need to be connected to, even if you aren’t actually using it all the time. In the future, battery storage, as opposed to contingency generation, could mitigate these costs inherent in conventional ‘baseload’ generation systems.

  2. Robert Westinghouse 2 years ago

    10 cents a kWh…and the poor and needy are paying 35 cents plus…seems unfair. Perhaps the LNP will help….I guess not.

    • Joe 2 years ago

      But Robert The COALition have plans to help the Aussie Battlers…like with Snowy 2.0 in what, 5 -10 years time…like with a HELE or two in what, 5 years time if the Aussie taxpayers bankroll it. The HELP will come once The COALition is turfed out and then Energy policy can be reset.

      • Robert Westinghouse 2 years ago

        Agree Mate… Snowy 2.0 is just spin and will never bring down power costs to the battler. What makes me mad (aside from the graft and
        corruption), is that current thinking is about smaller regional generation and distribution. But the LNP continues with heads up bottoms flogging BIG centralised expensive power.

    • Justin Matthew Rorke 2 years ago

      I could be wrong, but I believe the $0.10 per kWh is only for the energy component – they will have transmission and distribution (“poles and wires”) charges on top of that, and potentially other charges as well. Not to mention this is fixing a price for 10 years, when all indicators suggest power prices will fall after the current spike. Oh, and a large user of power would typically get a discount on their power price compared to a household too! 🙂

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