A press release published on the RenewEconomy website stated that Herbert Smith Freehills has advised Ararat Wind Farm (AWF) on its entry into two innovative corporate power purchase agreements with a Melbourne-based electricity retailer, Flow Power.
AWF is a 240MW wind farm installed in Victoria and jointly owned by Partners Group and OP Trust. The press release also stated that the offtake agreements supplement the present 80.5MW feed-in tariff offtake agreement entered into by AWF and the ACT Government in 2015.
Last week, OP Trust revealed it will be getting 51 percent of the shares in Flow Power. David Ryan leads the Herbert Smith Freehills team, assisted by Alexandra Carr and Luisa Giannone.
Ryan said, “We have seen a lot of different models for corporate PPAs in the Australian electricity market. The key issues are always about managing the difference in generation and load volumes at any point in time, managing locational pricing risks, and dealing with credit and default scenarios.”
“The Flow Power offtake agreements provided a balance that satisfied the credit and revenue certainty requirements of AWF’s project financiers, yet provided Flow Power with the flexibility to offer cheap renewable energy products to its large commercial and business customers and help build its business,” he added.
The press release has also mentioned that the team has advised on different corporate offtake/power purchase agreements in the renewable energy industry in the country, including the following:
- ANZ, Melbourne University and Coca Cola Amatil on their PPAs for the Murra Warra Wind Farm project;
- Pacific Hydro on its corporate PPA with Orora for the Clements Gap Wind Farm;
- Project proponents on corporate PPA processes run by AB InBev, Coles, UTS, Kleenheat, Powershop among others; and
- A number of other offtakers and project proponents on corporate PPAs that remain subject to confidential negotiations.
Peter Davis, Energy Specialist and Herbert Smith Freehills Partner commented, “The recent uptake of corporate PPAs has been remarkable. Electricity users are taking advantage of very competitive pricing and the opportunity to make significant contributions to their sustainability goals.”
He further commented, “A variety of models are being utilised including ‘sleeved’ or retailer-facilitated arrangements as well as contracts for differences entered into directly between projects and customers. Customers are also moving the market with alternative approaches to pricing, commercial operations targets, security, and quantity commitments.”
Read the complete press release here.