BlueScope Steel has entered into a landmark seven-year Power Purchase Agreement (PPA), which will see the steelmaker offtake 66 per cent of the 133MW of energy generated from a new 500,000-panel solar farm – to be developed by ESCO Pacific.
The deal, arranged through energy management adviser Schneider Electric, fixes the power price over the life of the contract, reducing the price for power in the immediate term and providing a long-term buffer against market volatility.
The landmark agreement was signed between Bluscope and its partners, ESCO Pacific and Schneider Electric, at BlueScope’s Port Kembla Steelworks on Friday.
BlueScope’s chief executive, Australian steel products, John Nowlan said the PPA was part of BlueScope’s gradual shift to renewable energy.
“This PPA is one of Australia’s largest corporate offtake agreements, and is the largest with a solar farm to date, and complements our firm electricity supply arrangements, which provide the reliable electricity supply we need for manufacturing processes that must operate 24/7.
“The PPA will help keep downward pressure on our energy costs, and will support the gradual transition to renewable energy. The volume under the agreement is equivalent to 20 per cent of BlueScope’s total Australian electricity purchases,” he said.
Brian Morris, vice president – Schneider Electric’s Energy & Sustainability Services, said: “We are delighted today to see the results of our partnership with BlueScope Steel come to fruition in the form of a landmark PPA deal with ESCO Pacific. With both wholesale electricity and LGC prices more than doubling between 2015 and 2018, companies have been left struggling with inflated energy bills and budgets.
“Through Schneider Electric’s dedicated energy advisory service, we have worked closely with BlueScope Steel to identify a longer term renewable energy PPA as strategy to reduce cost in short term and reduce volatility over longer term. With renewable energy costs falling fast, renewable PPAs help by providing lower-cost, fixed-price power, which enables businesses to cut electricity costs while also achieving sustainability goals,” Morris said.
ESCO Pacific managing director, Steve Rademaker, said BlueScope’s PPA will help accelerate the construction of the solar farm.
“By transacting directly with ESCO Pacific’s Finley Solar Farm, BlueScope’s PPA will enable the project to commence construction later in the year, creating jobs and injecting much needed value into the local economy,” he said.
The ground-mounted solar farm will be located at Finley, 100km West of Albury in the Riverina of NSW, and is expected to be online by mid-2019.