Antinuclear

Australian news, and some related international items

19 big South Australian industrial users join to buy electricity in bulk: a path to more wind and solar projects?

Industrial bulk-buy could open path for more wind and solar projects, REneweconomy

The South Australian Chamber of Mines and Energy (SACOME) this week won approval from the Australian Competition and Consumer Commission for 19 big industrial users to band together to negotiate long-term electricity contracts, having grown tired of the soaring prices and short-term contracts being offered by the state’s retail oligopoly.

The companies – which include Nyrstar, Arrium, Oz Minerals, and a collection of high profile auto groups, food companies, retailers, wineries and universities (see full list below) – account for 15 per cent of the state’s electricity demand.

Most have been hit with electricity price rises of between 30 and 80 per cent in the last year, and are now paying between 8c/kWh and 15c/kWh for their electricity, and are unable to get any long-term contracts.

SACOME’s Rebecca Knol says the tender is not designed to favour one technology or another, and they would welcome either renewables or gas. “We are not predicting the outcome,” she told RenewEconomy. “We don’t have a preference.”

The move, she says, is more about challenging the pricing power of the retail oligopoly. “By aggregating their load, they will improve their individual bargaining position and be able to establish more cost-competitive supply contracts,” Knol said.

But a quick glance at prices for new wind and solar farms, and for gas generation, puts renewables in the driving seat.

Wind and solar farms are being delivered for around 7c/kWh, but even the short-run marginal cost of gas generators (i.e.. the fuel and maintenance cost) ranges from 7c/kWh to more than 12c/kWh………

The total load of 19 industrial users (19 companies, 24 installations) is 246MW at peak, and represents annual demand of 1,957GWh. Most interestingly for the wind and solar plants, the businesses are offering an 11 year contract – a length of contract that has been all but impossible to secure from large retailers.

“We are looking for opportunities to improve the electricity price so our businesses can stay competitive,” Knol says. “What we are hoping is that they do see this as opportunity to change the wholesale market. It could bring on a new generator, or it could be with an existing generator.”

Australian corporates have been slow to engage with renewable energy developers – possibly given the fact that the fall in wind and solar costs below the prevailing wholesale price of electricity is only very recent.

Queensland zinc refiner Sun Metals, that state’s largest single energy user, is one exception, having decided to build its own 116MW solar farm, rather than commission a third party. The Sunshine Coast Council is also building its own 15MW solar farm in south-east Queensland…..

The original application included: Nyrstar, Arrium, OZ Minerals, Hillgrove Resources, Rex Minerals, Seeley International, SMR Automotive, Thomas Foods and Intercast & Forge.

Since the application was made in January 2017, Peregrine Corporation, Foodland, Independent Grocers of Australia (IGA), Pernod Ricard Winemakers, Orora Glass, Brickworks, Flinders University and the University of South Australia have also come on board.  http://reneweconomy.com.au/industrial-bulk-buy-could-open-path-for-more-wind-and-solar-projects-22023/

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April 22, 2017 - Posted by | energy, South Australia

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