University of Melbourne joins major new renewable energy project in regional Victoria
The University of Melbourne, as part of a consortium led by Telstra, has entered into a long-term Power Purchase Agreement (PPA) covering the first stage of the Murra Warra Wind Farm owned by renewable energy project developer RES and Macquarie Capital.
When fully constructed, the wind farm near Horsham in Western Victoria will generate more energy than any other wind farm operating in the southern hemisphere.
The consortium of electricity buyers includes, in addition to the University and Telstra, ANZ and Coca-Cola Amatil; each member of the buyer group has signed a separate PPA with the project for a portion of the total capacity.
Collectively, the PPAs with the consortium members provide the developers with sufficient off-take certainty to commence construction of the 226 megawatt (MW) capacity first stage of project.
Through the agreements, electricity users in the consortium are securing substantial long-term electricity generation at an attractive wholesale price in a challenging market environment. Moreover, the buyers will also obtain the benefit of clean energy products created by the project.
Construction of stage one of the wind farm will begin in 2018, and it is expected to be fully operational by mid-2019. The project will collaborate with local businesses and community groups to create the opportunity for local and indigenous supply arrangements to support the construction and operation of the plant.
University of Melbourne Corporate Finance Director Daniel Baird said that by working together, the consortium achieved pricing well below the current market values for both the energy and renewable certificates.
“The power purchase agreement will assist the University, a substantial energy user, to better manage its exposure to volatile electricity prices as it does with other material commodity exposures, with the agreed fixed price substantially less than current wholesale market prices,” Mr Baird said.
University of Melbourne Vice Principal, Administration and Finance & CFO Allan Tait said: “We are pleased to be a part of the consortium of electricity users and are grateful for Telstra’s leadership. From the University’s point of view, the PPA is a very good result, securing long-term electricity at an attractive price and substantially achieving our sustainability target of zero net emissions from electricity by 2021.
“We are also proud to be reducing emissions here in Australia, by supporting a project located in Victoria that will create a positive ripple effect through the regional economy. It is important to the University that Telstra shares its commitment to local and indigenous supply arrangements and that the delivery of this wind farm will reflect those values.”
“We acknowledge the work undertaken by our counterparties at RES Australia and Macquarie in developing a world-leading project. This power purchase agreement reflects the University’s commitment to engagement with industry and positions the University of Melbourne as the first Australian university to achieve its emissions targets through directly contracting with new renewable energy supply.”
The University’s counterparties in the PPA have acknowledged the importance of the consortium in enabling them to proceed with the wind farm.
RES Australia’s Chief Executive Officer Matt Rebbeck said: “The consortium’s involvement was critical in underwriting the project, which would be an important addition to Australia’s supply of renewable energy."
Head of Macquarie Capital Tim Bishop said: “Increasingly, large users of energy are contracting directly with renewable energy producers and we see this direct engagement as a meaningful contributor to the world’s transition to a lower carbon economy.”
Murra Warra Wind Farm Stage 1 facts:
226MW first stage with a total permitted capacity for the project of 429MW.
Enough clean energy to power the equivalent of more than 220 000 Victorian homes.
Approximately 150 full time direct jobs during construction and eight during operation.
Reduce CO2e emissions by 900 000 tonnes per annum, the equivalent of almost 320 000 fewer cars on the road each year.