Corporate PPAs and Peer-to-Peer energy trading

Corporate PPAs and Peer-to-Peer energy trading

12 Oct 2017, 1:10 PM - 2:30 PM

Room 213, Melbourne Convention & Exhibition Centre

Language:
English (Australia)

Chairperson: Charlie Knaggs, Principal, Energy & Climate Change, Point Advisory

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Corporate PPAs – Opportunities and Challenges

Dmitry Danilovich, Head of Clean Energy, KPMG

The market for corporate PPAs in Australia is becoming more active, as a number of industrial and large commercial energy users are looking to procure their power supply directly from generators.  Declining costs of wind, solar PV and batteries are creating opportunities for renewable energy projects to provide competitively priced electricity supply to corporate buyers.  

Where energy users have sufficient land available, they often seek to develop ‘behind the meter’ generation which may enable them to achieve cost savings on the variable component of network charges and environmental obligations. 

However, renewable energy project developers are facing a number of challenges in securing corporate PPAs, as many corporate buyers are:

  • seeking packaged solutions (often combining renewable energy and grid supply, battery storage, or gas/diesel fired generation to firm up intermittent renewables) rather than taking integration risks;
  • not prepared to accept the risk of on-selling Large-scale Generation Certificates surplus to their requirements and are seeking for the project developer to manage this risk;
  • often hesitant to commit to long contract terms required by the developers to raise debt and equity at efficient costs.

Credit quality of PPA counterparties is a key consideration for the generators and their financiers.

The presentation will examine corporate PPAs from the perspectives of both the renewable energy project developers and corporate buyers based on KPMG’s recent experience in the Australian market. 

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Experience of implementing Corporate PPAs in India

Shashank Adlakha, Head of International Business, ReNew Power 

Q&A

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Bringing energy into the sharing economy

Darius Salgo, Co-founder  and CEO, Nexergy

Increasing penetration of distributed energy resources (DER) presents both a challenge and an opportunity for electricity utilities, retailers and networks. Energy networks globally are being confronted by high levels of solar PV for which output does not coincide with peak demand. As such, network management remains high cost and investment intensive, which in turn requires cost recovery from energy consumers.

Here in Australia, 17% of consumers—some 1.6 million of us—have already invested in DER. This consumer-led distributed energy drive is set to continue, with Bloomberg New Energy Finance forecasting that 36% of Australia's capacity will be “behind-the-meter” by 2040. These “prosumers”—those who both produce and consume energy—cannot fully realise their investment in DER due to low and changing feed-in tariffs. Similarly, many consumers would like to install DER but cannot, whether due to cost or their living circumstances (e.g. they live in an apartment or rent), for example.

At the same time utilities are seeking methods to harness behind-the-meter DER to reduce network and generation costs. Utilities are experimenting with direct control for accessing aggregated DER, for example via Virtual Power Plants (VPPs). However, if these solutions are implemented in a customer-unfriendly manner, misaligned with industry and regulatory moves towards greater consumer choice, they threaten to widen the “trust gap” that has emerged between the energy companies and their customers.

Peer-to-peer energy trading—where people who own solar and/or batteries are able to trade their electricity with others in their community—is often painted as a disruptive play aimed at routing around existing industry players and undermining their business models. Sure, trading can provide better returns to DER owners, and access to affordable clean energy for customers that can’t access DER otherwise. But what if local energy trading could build a bridge across the trust gap, so that DER can be controlled both optimally and equitably? What if we could unlock new value streams through local energy trading, for both utilities and customers alike?

In this talk, Nexergy co-founder and CEO Darius Salgo explores these questions in more detail, and outlines how a local energy trading platform can fulfil the promise of increased penetration of DER, greater energy equity and reduced energy costs for everyone.

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Peer to Peer energy markets using blockchain - insights from a virtual trial

Doug Cook, Managing Consulatant Marchment Hill Consulting

Distributed Energy Resources (DERs) will lead to the emergence of markets which could disrupt the Australian energy industry. One of these emerging platforms may occur in the form of Peer-to-Peer energy trading (P2P trading), which allows customers to buy, sell or swap their electricity with each other, facilitating customers’ direct participation in markets.

A barrier to the deployment of P2P trading has been the cost involved in establishing a solution to validate, execute and settle these numerous customer transactions. Recent advancements made in distributed ledger technology (DLT), better known as blockchain, a digital record of transactions that is shared instantaneously across a network of participants, provides a potential solution. 

Marchment Hill Consulting (MHC), in collaboration with AGL and IBM, has developed an ARENA funded experiment using real customer data from one of AGL’s customer and technology trials to conduct a virtual P2P trading trial to assess the applicability of DLT for P2P trading. The project used data from 68 homes with a mix of solar, battery and smart A/C which were deployed and monitored as part of AGL’s Carrum Down trials of smart A/C devices. The data and DER types enabled the analysis of multiple trading options which could create cost and efficiency benefits to customers.

Ryan will share the results of this experiment, including an assessment of the viability of the solution, customer impacts, arbitrage opportunities and broader system implications. Leveraging MHC’s P2P experience and their understanding of emerging market models in Australia and abroad, he will discuss the way these options may disrupt and shape the electricity industry. 

After discussing the findings of the P2P trading trial, the next question will be: what happens in an energy market with multiple marketplaces? Will P2P and other DER markets emerge in a state of chaos before becoming coordinated and ubiquitous? What options do the big data players such as google or IBM have in this new market? Will new players emerge (e.g. DER platform owners?) What could a future of multiple markets become?

Contributors

  • Charlie Knaggs

    Chairperson

    Principal, Energy & Climate Change

    Point Advisory

    Charlie advises corporate and government clients in the areas of climate change and energy. His expertise lies in energy efficiency, energy...

  • Dmitry Danilovich

    Speaker

    Head of Clean Energy

    KPMG

    Dmitry Danilovich is the Head of Clean Energy for KPMG in Australia.  He brings over 20 years of experience in the Australian energy sector having...

  • Shashank Adlakha

    Speaker

    Head of International Business

    ReNew Power

    Shashank Adlakha is the Head of International Business at ReNew Power Ventures Private Limited (ReNew). He is a Production and Industrial Engineer...

  • Darius Salgo

    Speaker

    Co-founder and CEO

    Nexergy

    Darius is passionate about creating the conditions for the next generation of clean energy technologies to thrive. Born and raised in Sydney, Darius...

  • Doug Cook

    Speaker

    Managing Consultant

    Marchment Hill Consulting

Opening Times
Wed 3 Oct Exhibition 9.00am – 5.00pm
Wed 3 Oct Networking Event 5.00pm - 6.30pm
Thur 4 Oct Exhibition 9.00am – 5.00pm

Registration opens 8.00am

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