Step-by-step analysis of corporate PPA’s

  • Session Topic
    Energy Efficiency
    Finance

Step-by-step analysis of corporate PPA’s

4 Oct 2018, 2:50 PM - 4:10 PM

Room 218
Language:
English (Australia)

Chair: Nathan Dale, Director, Point Bundle

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Will 2018 be the year of the corporate renewable PPA? 

Anita Stadler, Principal Consultant, Energetics

Interest in corporate renewable PPAs continues to grow. From 2016 to April 2018, corporate renewable PPAs supported projects with a combined capacity of 1,629 MW. 1,350 MW was contracted with new projects. This is equal to 23% of the Clean Energy Regulator’s 2016 estimate of new renewable energy capacity required through to end 2018 to meet the 2020 Renewable Energy Target. Many more transactions are expected in the coming months following public tender processes in recent years by large organisations exploring corporate PPAs. 

For corporates, the rationale for using a corporate PPA as a risk management instrument under current market conditions is compelling. With futures contract prices more than doubling across the NEM, corporates are seeking to take back control and manage the cost of the retail energy component of their electricity bill differently. 

Corporates that act in 2018 have a good buying opportunity. Interest rates, a key driver of PPA prices are still low and there is intense competition amongst new renewable energy projects to secure PPAs through to 2020. 60% or more of the value of a corporate PPA is likely to be realised well before 2025. Delaying will reduce the financial benefit due to the higher LGC and electricity prices over the period to 2021. The time to act is now. 

A well-structured corporate PPA with an appropriate contracting and pricing model can yield significant savings and provide an ongoing hedge against future price volatility. Large energy users need to assess their electricity and environmental markets exposure and consider the optimal combination of risk retention and risk transfer. By taking a more direct role in managing their energy price risks, corporates are stepping into a new domain and are naturally risk adverse. What many may not realise is the flexibility that can be achieved at the design phase of the corporate PPA to ensure that it can meet their needs. 

In this presentation, Energetics will draw on our experience supporting Australia’s first retail supply-linked renewable PPA buying group, and several other renewable corporate PPAs. We will discuss the factors that point to a buyers’ market in 2018, the evolution of procurement options and opportunities to mitigate risks when designing a PPA market approach and model.

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Corporate PPAs – Structures, trends and lessons learned

David Cooper, Partner, Baker McKenzie

Corporate PPAs are gathering momentum in Australia. In the last 12 months a number of corporates have gone out to market for PPAs, aggregated buyer groups are forming and we are now starting to see Corporate PPAs getting banked. 

This presentation will address: the structures for Corporate PPAs which have emerged and their advantages and disadvantages; bankability issues; the key motivations for corporates seeking a Corporate PPA and how Corporates are thinking about their associated risks and benefits; options for structuring a Corporate PPA tender and tips for ensuring continued buy-in from Corporates from start to finish of the procurement process.

The presentation will also consider the likely implications of the NEG for Corporate PPA structures. 

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Melbourne Renewable Energy Project (MREP) project experience and future opportunities

Peter Shelley, Energy, Carbon and Fuel Lead, Australia Post

This presentation will share Peter's MREP project experience as well as the opportunities available to Australia Post in the future, whether on their own or as a member of other potential partnerships.

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Digitally enabled PPAs and the future of large scale peer-to-peer electricity market

Mantas Aleks, Head of Business Development and Australian Operations Lead, WePower

This presentation will focus on how the PPA market is moving towards standardisation and how digital technologies are bringing new scale and efficiencies to these currently bespoke and expensive transactions. The new electricity system is being built around a very diverse set of assets and resources, which brings a new layer of complexity to consumers and businesses. However, it also holds a promise of a truly decentralised value chain where with the right tools in place buyers could finally be in the driving seat.

Contributors

  • Nathan Dale

    Chairperson

    Director

    Point Bundle

    Nathan has over 18 years of commercial experience, including 10 years in the sustainability and environmental markets. He has done business in over...

  • Anita Stadler

    Speaker

    Principal Consultant

    Energetics

    Anita has more than 20 years’ experience in energy, banking and strategy consulting. Prior to joining Energetics in 2011, she held positions with...

  • Peter Shelley

    Speaker

    Energy, Carbon and Fuel Lead

    Australia Post

    For the past five years Peter has been the Energy, Carbon and Fuel lead for Australia Post, and has loved the challenge in driving down the carbon...

  • David Cooper

    Speaker

    Partner

    Baker McKenzie

    David Cooper is a partner in the Banking & Finance team at Baker McKenzie. He is very experienced in the project financing of greenfield renewable...

  • Mantas Aleks

    Speaker

    Head of Business Development and Australian Operations Lead

    WePower

    Mantas is the Head of Business Development and Australian Operations Lead for WePower, a blockchain-based renewable energy procurement and trading...

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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