The continuing fall in the cost of new wind and solar farms, and the emergence of new firming contract products, is allowing large corporate and industrial users to slash energy costs by up to 40 per cent.
TFS Green, a Melbourne-based wholesale energy and environmental market broker, is on Friday launching its new “Renewable Energy Hub”, a day after the formal announcement of its first transaction with the Kiamal solar farm and Mars Australia.
TFS Greens’s Chris Halliwell says wind and solar is clearly delivering electricity at a 40 per cent discount from what is available to medium and large users elsewhere on the grid.
That assessment is shared by Sanjeev Gupta and his team at SIMEC ZEN Energy, which is looking at similar savings from building a massive suite of large-scale solar, pumped hydro and battery storage to power the Whyalla steelworks and other big energy users.
The Korean owned zinc refiner Sun Metals, which recently connected the first stage of its 124MW solar farm to the grid, is anticipating similar savings that will underpin a major expansion of the Townsville refinery.
Halliwell says the new RE Hub will serve as a marketplace to match commercial and industrial energy buyers with wind and solar project owners and developers, and facilitate the work of consultants and energy retailers.
It will also provide firming contracts for those wanting to reduce their exposure to market spikes at times when their contracted wind or solar farms are not producing.
“The objective of the platform is simple,” he says. “It is a marketplace to standardise and drive more wholesale renewable energy, firming products and corporate PPA transactions.”
The firming products, such as its recently released “firm solar product” allow renewables to be presented as transactional firm contracts to the wholesale energy market and build liquidity for renewables to function with the wholesale contract market.
“The future of the renewable energy market will require firming solutions for intermittent generators to transact advantageously,” he says,
“Renewable Energy Hub will drive off-take opportunities for projects and energy cost saving options for businesses, through simplifying and standardising corporate PPAs transactions and making them available for more energy users.”
Halliwell estimates more than 20 corporates are already engaged in detailed PPA discussions, and intermittent firming market solutions are already being transacted in the wholesale market.
One of the first users of the hub was Mars Australia, which has contracted to take around one-quarter of the output from the Kiamal solar farm to match its annual electricity use of 101GWh from its six Australian factories and two offices.
Kiamal is being developed by Total Eren, and director Michael Vawser said the deal was unique, and emerged only because of the introduction to the Renewable Hub marketplace.
“To end up with a 20 year PPA covering 100 per cent of MARS Australia’s electricity use is extraordinary and ground breaking,” he said in a statement.