RENEWABLE ENERGY IN THE PUBLIC SECTOR: OFF-SITE RENEWABLE ENERGY GENERATION
July 2019
Melbourne Renewable Energy Project (MREP)’s Crowlands Windfarm near Ararat.
Photo credit: Pacific Hydro Australia.
Government agencies can contract with an off-site renewable energy generation project through a power purchase agreement (PPA). In NSW, Sydney Metro North West has negotiated a 15-year agreement with a large-scale solar farm to offset the project’s greenhouse gas emissions, and reduce energy costs and exposure to electricity market volatility.
If a government agency is too small to contract directly, it can take part in a PPA buying group, which allow a number of organisations – private and/or public sector – to collectively contract the supply of renewable electricity from an off-site generator. Led by the City of Melbourne, a group of local governments, businesses and government agencies have already contracted part of their electricity supply requirements from an off-site wind farm through participation in the Melbourne Renewable Energy Project (MREP) buying group. This includes Fed Square Pty Ltd, Melbourne Convention and Exhibition Trust and Zoological Parks and Gardens Board (Zoos Victoria) – Victorian government agencies – and Australia Post, RMIT and the University of Melbourne – Australian government agencies. MREP demonstrates how government agencies – and others – can come together to take an active role in securing their energy procurement and mitigating climate change by procuring renewable electricity supply.
Government agencies can consider these opportunities, but should be aware that these PPA arrangements could be considered a ‘finance lease’ under Australian Accounting Standards. In that case, they may need to seek approval from a relevant Minister to grant them power to enter into contracts.
Find the case study on page 18 of Navigating a dynamic energy landscape: a briefing for government agencies.