Local Government renewables group purchasing

A report on the potential of local government collaboration towards a renewable and more resilient energy system for Melbourne

21 Sep 2018

Urban stakeholders have a key role as end-users in the transition to a renewable and more resilient energy system. The Melbourne Renewable Energy Project (MREP) is an innovative procurement model through which urban stakeholders across sectors are procuring renewable electricity in collaboration. Expansion of group renewable Power Purchase Agreements (PPAs) among metropolitan councils of Melbourne, building on the MREP pilot, has been identified as a resilience- building activity as part of the Resilient Melbourne Strategy’s ‘adapt’ actions. This action responds to the stresses of climate change and development pressures on ecosystem services related to fossil fuel-based electricity supply, and the shocks of electricity supply disruption.

This report presents research undertaken over a six-month period through collaboration between Resilient Melbourne and the University of Melbourne. Based on in-depth interviews with 27 key stakeholders across the public, private, and civil sectors and a review of relevant policy documents and reports, the research sought to understand the viability of group renewable PPAs for metropolitan Melbourne councils and thus inform Resilient Melbourne’s facilitative role in the expansion of the model.

To situate group renewable PPAs in the context of urban development and governance, the City Resilience Framework (Arup 2015) is employed to understand and communicate the benefits of renewable energy procurement through an urban resilience lens. The Framework identifies elements related to the health and wellbeing of urban populations; the function and prosperity of the economy and society; the development of critical infrastructure and maintenance of the environment; and promoting leadership and long-term planning. Drawing on the MREP pilot, group renewable PPAs contribute to:

Mitigating climate change impacts through emissions reductions in electricity consumption and reducing demand for fossil fuel-based electricity supply, while maintaining the use of existing grid infrastructure;

Leadership and long-term planning through cross-sectoral collaboration and demonstration of a new approach to electricity procurement;

Local economic development through job creation and opportunities for local businesses across the supply chain, as well as support for the renewable energy industry more broadly; and

Community engagement through grant funds proportionate to the generator’s annual profits.

In the context of climate change and urban resilience imperatives, group renewable PPAs represent a means through which local government, at a metropolitan scale, can take initiative and responsibility for its environmental impacts as a service to the community. Resilient Melbourne can enhance the development of this approach to energy procurement among Melbourne councils by leveraging its metropolitan scope, establishing senior-level engagement, and providing access to resources including skills, experience, and stakeholder networks.

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