Businesses benefit from combining PPAs with demand response

The Institute for Sustainable Futures (ISF) at the University of Technology Sydney, in partnership with WWF-Australia and business energy retailer Flow Power, has announced its report into the benefits of combining corporate renewable power purchase agreements (PPAs) with demand response for Australian businesses.

‘Best of Both Worlds: Renewable Energy and Load Flexibility for Australian Business Customers’ outlines the prospective savings from the uptake of corporate renewable PPAs with demand response for three large Victorian-based businesses, representing the following industries: water utilities, agriculture and industrial manufacturing.

Utilising data provided by Flow Power and its customers, ISF evaluated the electricity consumption, operations and potential flexible usage of the three businesses — ANCA, Select Harvest and Yarra Valley Water — to determine the financial savings provided by combining demand response with corporate renewable PPAs.

Across all three businesses, demand response had the potential to reduce costs by up to 33% — a figure that could translate to several hundred thousand dollars a year depending on the business. This was in addition to the significant savings already provided through the wholesale purchase of power on a corporate renewable PPA.

The modelling used the financial savings provided through corporate renewable PPAs as a baseline for estimating the additional financial savings that each business could expect from active demand response. It also assessed varying approaches to demand response, such as shutdowns of non-essential operations and on-site electricity generation.

	ANCA	Yarra Valley Water	Select Harvest
Sector	Industrial manufacturer	Water utility	Nut and health food
Demand response type	Shutdown of non-essential plant	On-site generation	Shutdown of non-essential plant
Reduction in energy costs (on top of modelled PPA savings)	2.3%	24%	33.3%

“Demand response has great potential to reduce costs for the electricity grid and for customers,” said ISF Research Consultant Jonathan Prendergast, the lead author of the report. “Our analysis of on-the-ground data confirms that well-implemented demand response can achieve cost savings and manage risk for Australian business customers paying wholesale rates.”

Last year, Flow Power introduced corporate renewable PPAs to the Australian market with the view to giving local businesses a way to tap into low-cost wholesale renewable energy over a long-term period.

“Demand response from businesses has a pivotal role to play in delivering reliable low-cost power for all Australians, as well as greater financial savings,” said Flow Power Managing Director Matthew van der Linden.

“For customers on corporate renewable PPAs, firming can be the most expensive element. This report shows that demand response can remove the costs associated with firming and yields additional savings.

“Where the financial savings delivered to customers on corporate renewable PPAs over the last year are just a small snapshot of a 10-year or more agreement, demand response gives businesses greater flexibility to control the prices that they pay.”

Image credit: ©stock.adobe.com/au/Karen Roach