Energy

Melbourne: Teaming Up to Buy Renewable Energy

About 90% of Melbourne’s electricity comes from brown coal power plants and as the city center is dominated by high-rises, it is not possible to de-carbonize the electricity supply sufficiently through on-site renewable use. Therefore, Melbourne is developing an innovative group procurement model for renewable energy where the city and 13 other organizations agree to purchase electricity from a renewable energy plant via a long-term contract. The combined procurement of the group, consisting of other city governments, cultural institutions, financial institutions, and property businesses, will result in the construction of a new solar plant or wind farm supplying approximately 100 GWh of electricity to the grid.

134,000 tonnes of CO2 reduced per year by converting 100 GWh of electricity from brown coal to
renewable sources

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Melbourne aims to scale the model further to reach its target of 25% electricity from renewable sources by 2018. The city adopted the procurement model to circumvent national policy inertia in the renewable energy industry by using existing market mechanisms and developing a replicable model that is not reliant on policy changes. Melbourne is developing a full suite of tools and information to assist other cities in adopting similar procurement models.

The challenge

By entering into partnerships with other organizations, Melbourne is able to significantly improve the share of renewable energy consumed in the city and provide reliable demand for renewable providers to allow their projects to proceed and further drive down costs.

Co-benefits

Economic Approximately 144 jobs will be created to construct the new renewable energy facility, plus 12 jobs in the ongoing operation and maintenance of the plant.

Environmental In Australia, a major barrier to investment in utility-scale renewable energy facilities is the inability of new generators to secure power purchase agreements. This procurement project seeks to change this trend.

Social Utility-scale renewable energy facilities are creating employment in areas that are in economic and social decline due to the closure of other industrial sectors or challenging environments for agriculture due to drought and climate change.

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