Zen Energy shoots for ten fold leap in market share with focus on solar and battery storage

Zen Energy is aiming to boost its share of Australia’s electricity market by a factor of ten over the next three years, with the focus on a combination of solar and battery storage.

The Ross Garnaut-led Zen, in releasing its first ESG report, says it aims to increase the amount of electricity sold each year from 1 terrawatt hour to 10TWh by 2025, which would give it a 5 per cent share of the National Electricity Market, versus just over 0.5 per cent now.

“How do we get from 1TWh of load contracted today to 10TWh by 2025? We start by writing a lot of PPAs (power purchase agreements), with the priority on solar and battery storage,” CEO Anthony Garnaut said in a social media posting.

Zen in September signed a 10-year deal with renewables giant Acciona Energía’s Waubra wind farm northwest of Ballarat in Victoria for roughly 200,000MWh a year.

The Acciona deal, together with a supply agreement reached with the soon-to-be operational, Tailem Bend 2 Solar Farm, means Zen will source renewable electricity from 17 different solar and wind assets around Australia.

Zen says renewables and storage are cheapest option

The company estimates the customer cost of power purchase agreements where renewables are backed up by storage at to be about $100 per megawatt hour, well under current wholesale prices.

Zen started its journey to supply cheap “baseload renewables” to Australian businesses in 2017, when it obtained a license to retail electricity, with a focus on users with demand of more than 160MWh a year.

Zen split from entrepreneur Sanjeev Gupta’s SIMEC group of companies in 2020, allowing Zen to focus on building its retail business. It has contracted to supply a range of customers including the South Australian government, CSIRO, and the Southern Sydney Regional Organisation of Councils.

It is now committing to net zero Scope 1 and Scope 2 emissions by the end of next year, and will also cut Scope 3 sold electricity emissions in line with the Science Based Target initiative’s (SBTi)  guidance for power utilities.

“When we reset the Zen organisation in 2021, our aim was to become Australia’s first electricity retailer to have a near term science-based reduction target in line with limiting global warming by 1.5°C,” Garnaut said. “With this commitment we have achieved that.”