Making a Power Purchase Agreement work for your business

Australian businesses have seen significant rises in power prices in the last year (2018). This is especially true for manufacturers that rely on large quantities of energy to power their operations.

Manufacturers vary from business to business, but most need three things from their energy contracts:

  • reduce power costs
  • achieve price certainty
  • cut overall emissions

While fixed-rate contracts can tick some of these boxes, they won’t meet them all. So, what’s the alternative?

Discover Power Purchase Agreements (PPA)

PPAs are a game changer. They tap into the wholesale market over a long-term period. For businesses, this means agreeing to purchase power from a renewable source at a wholesale price for up to 10 years. It’s a cost-effective way to secure long term price security, reliability and meet sustainability goals.

PPAs can also be integrated with energy management strategies such as demand response to yield even greater savings.

Why make the switch?

Australia’s power market has changed, there’s more variability so it makes sense that we need to start being smarter about our power usage.

With so many renewables entering the market, there is now an abundance of power in the middle of the day. This means that manufacturers who are tapped into wholesale prices can make the most of low-cost troughs and avoid high-price peaks.

PPAs are a simple way for businesses to tap into the wholesale market to make the most of these abundant low-cost renewables and secure a long-term energy solution that offers flexibility and transparency.

Will a Power Purchase Agreement work for you?

If you’re a manufacturer looking to make the switch to a PPA, here are some things to take into consideration before taking the plunge:

1. How do you operate?

Look at how you consume power and determine your energy needs from there. If the bulk of your energy-intensive activities are completed in the middle of the day – a time when solar is cheap and abundant – a solar PPA could be the right fit. Alternately, wind provides reliable power throughout the day. Together, both sources work to keep prices down.

2. Is the price right?

PPAs can yield savings of up to 50% and this is without incorporating other energy management strategies such as demand response. It can be easy to fall into the trap of signing a standard fixed-rate contract but for many manufacturers, there are more cost-effective alternatives.

3. Long-term contracts

Instead of signing variable contracts at two or three year intervals, businesses that sign PPAs agree to purchase power from a renewable source at wholesale prices for long-term periods. It’s a smarter solution that delivers low-cost energy without compromising on sustainability goals. You won’t need to renew your contract as often, freeing up time to focus on improving your energy strategy in different ways.

Questions about the PPAs? We’re here to help.

If you’re a Flow Power customer already, please reach out to your dedicated Client Solutions Manager.

If you’re not a Flow Power customer contact our friendly team today:

📞 1300 08 06 08 (within business hours)

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