The University engages in off campus renewable energy projects and market mechanisms to ensure we reach our target of net zero emissions from electricity by 2021.
We are involved in significant renewable energy purchase agreements with the Melbourne Renewable Energy Project (MREP) and as a partner in the Telstra led consortium with the Murra Warra Wind Farm. These agreements will have together generated enough energy (118 GWh) to offset 100% of emissions the University produces from electricity each year by 2021.
Melbourne Renewable Energy Project
In 2017 the University joined 13 other organisations in the Melbourne Renewable Energy Project (MREP) to commit to the purchase of 88 GWh of electricity each year from the Crowlands Wind Farm.
Murra Warra Wind Farm
The University engaged in a power purchasing agreement with Murra Warra Wind Farm as a member of the Telstra led consortium in 2017.
Market mechanisms to offset our impact
In 2018 the University signed a flexible retail electricity agreement with an energy retailer to conduct ‘progressive purchasing’ through a Governance Committee. This means that we have governance structures and processes in place to manage electricity and carbon pricing risks, enabling us to lock in energy prices and reduce our exposure to volatility in the market.
What is a power purchasing agreement?
A power purchasing agreement (PPA) is a financial instrument whereby the University:
- Purchases electricity and large-scale generation certifications (LGCs) from the wind farm for a fixed price per unit, then
- Sells the wind farm electricity to the national electricity market (NEM) at the market price per unit.
LGCs (or accredited carbon offsets) can then be surrendered to meet the University’s net zero emissions commitment.
Committing to PPAs provides long-term certainty of supply and competitive pricing in a volatile electricity market. It also brings additional renewable energy into the Victorian electricity grid by investing in projects through combined purchasing power with other organisations.
PPAs are an innovative approach to increasing renewable energy capacity and demonstrate a viable model for cities, organisations and institutions globally to replicate.