New research from energy retailer, Flow Power, shows that businesses forgoing fixed-rate contracts for wholesale prices could expect significant price reductions.
A study of 670 medium to large businesses, showed wholesale power would have delivered savings in total of up to $97 million for the last financial year.
Businesses that are tapped into the wholesale power market are more in tune with its highs and lows, and are best placed to respond to peaks in demand and soaring prices.
These businesses have the power to keep power prices down and the lights on for everyone – even during periods when demand is at its peak.
In the first quarter of 2018, South Australia’s business could have reduced energy prices by 2.3c/kWh for the entire state, simply by choosing to power down during peak price events.
Businesses have a critical role to play in the investment in Australia’s growing pipeline of renewable energy projects.
If 670 medium and large-scale businesses across Australia made the decision to contract renewable energy through corporate renewable Power Purchase Agreements (PPAs), this would drive investment in more than 1845 MW of renewable generation.
Businesses sign up to buy a portion of the output of renewable generators for periods of up to ten years through corporate PPAs pay significantly lower prices and benefit from price certainty for the life of their contracts.
If the 670 businesses, analysed by Flow Power, signed up to renewable corporate PPAs, they would have saved up to $195 million in total on energy costs in the last financial year.
Without PPAs, choosing to buy wholesale power still delivered significant savings of up to $97 million in total.
Flow Power managing director Matthew van der Linden said the traditional fixed-rate model was no longer meeting Australian businesses’ needs for cheaper, more transparent power solutions.
“The benefit of connecting businesses to the true signals of the energy market, either through PPAs or wholesale power, is twofold. We see businesses save on what can be their most costly expenditure – energy – as well as everyday Australians benefitting from greater investment in renewable generation and lower energy costs delivered by wholesale demand response,” he said.
“This can be achieved without new policy or government intervention, all it would take is businesses choosing to take more control over their power, said van der Linden.