Schneider Electric has recently launched a new service to assist businesses in the adoption of low-cost renewable energy, through power purchase agreements (PPAs) and other projects.

In an exclusive interview with Ecogeneration, Schneider Electric’s vice president of Energy and Sustainability Services in Australia Brian Morris discusses why it’s important to help Australian businesses source low-cost renewable energy with PPA’s and why it’s important for businesses to cut their energy costs.

Why is it important to help Australian businesses source low-cost renewable energy with PPA’s?

It’s important from both a cost and a sustainability perspective. The rapid closures of coal-fired power plants and an increase in the price of large-scale generation certificates — two of several converging events that have caused wholesale prices in Australia’s National Electricity Market to as much as triple since 2016 — have left companies struggling with inflated energy bills and budgets. PPAs help by providing lower-cost, fixed-price power, which enables businesses to cut electricity costs anywhere from 10 to 50%. In parallel, businesses are working to respond to stakeholders or strategic demands for renewable energy adoption and more sustainable operations. Here, PPA advisory services can help businesses meet this demand by accelerating sustainability initiatives.

What momentum is building in Australia around PPA’s?

The sharp incline of energy prices, coupled with demands to push sustainably initiatives forward is certainly causing momentum to build in Australia around PPA’s. Over 80 international organisations are already active in Schneider Electric’s New Energy Opportunities (NEO) Network, including Equinix and more than 20 other companies with footprints in Australia.

Why is it important for businesses to cut energy costs?

Historically energy has been a competitive advantage for companies to do business in Australia. Current high energy costs are seriously hindering company’s international competitiveness, and with certain costs continuing to increase, it’s important that organisations act quickly. Prices for wind and solar will continue to fall, meaning businesses can cut energy costs while still pushing sustainability initiatives forward. Savings made by cutting energy costs can therefore be put towards other business demands.

What role does the NEO play locally?

Schneider Electric’s NEO Network connects Australian companies with resources to efficiently navigate the process of evaluating PPAs, and other renewables and cleantech options. An online community of corporations, developers and solutions providers, the NEO Network gives members a forum to share insights, identify prospects and accelerate projects. It also provides access to exclusive global market intelligence.

What are the predictions for prices in the wind and solar sectors considering they are falling?

The price of renewables is expected to fall, though not at the same pace we have experienced over the last decade. Much of the cost reductions we have experienced have been gained through improvements in technologies. With technologies more readily available, we are now likely to see cost reductions come from simplifying installation.

What do you imagine the sector to look like in five to 10years time?

Within the 10 year horizon I imagine it will be quite different to what we are seeing now. Renewables will continue to thrive due to their significant cost advantage, replacing the large scale coal plants as they reach their end of life, and the addition of batteries to renewables will be common place. However, I feel the more significant change will be in the demand side of the equation. Consumers will play a much more active role in the energy market. Demand response will be common place, with consumers large and small, managing their energy use in sympathy with the needs of the energy market. This activity will be key to the integration of renewables. Electric vehicles will be an important part of the energy mix, adding to consumption, but providing flexibility to manage demand. Everything will be “smart”, smart cities, smart grids, smart buildings, smart factories, and many of the things we do at work and home in our daily lives will be automated, leading to better experience and more efficient outcomes.