Australia is the most active market in the world for corporate PPAs according to Lithuanian-based WePower, and one of the fastest developing energy markets globally.
The renewable energy procurement and trading platform is now set to fast-track Australia’s corporate power purchase agreement market.
The company now has a team of four in Melbourne, and has recently secured a strategic equity investment in a seed round led by Japanese investment and trading business Marubeni Corporation to accelerate its expansion into the region.
The European company is dedicated to making it easier for corporate and industrial customers to buy green energy directly from producers. It arrived on Australian shores as the first energy startup to join Startupbootcamp Australia.
This allowed the startup to build relationships with many different players and customers in the area, according to WePower’s co-founder and chief executive officer Nikolaj Martyniuk.
He says the company is also keen to stay in Australia because it’s the most active market in the world for corporate PPAs, and one of the fastest developing energy markets globally.
Although it’s not the only company operating in the smart energy procurement space Martynuik says it’s one of the only ones focused on the corporate PPA market, which is usually dominated by energy consultants and lawyers rather than tech players.
“Two-thirds of the energy produced worldwide is consumed by commercial and industrial clients.
“So, any meaningful change towards a fully sustainable future is not possible without enabling more corporate and industrial consumers to participate in the green energy revolution,” he says.
When the business arrived in Australia it started working with Baker McKenzie to innovate the corporate PPA to make it as simple as possible for people to understand. These learnings have now been encapsulated into a short standardised digital contract.
The partners have managed to cut the traditional expensive and time-consuming process of signing a corporate PPA down to as little as a six weeks, provided participants are already signed up to the platform.
The standardised PPAs platform has also made it easier to bring in multiple parties simultaneously at no additional cost. Martynuik says aggregated corporate PPAs are typically highly complex and can take years.
“To date, only the largest global corporations have been able to access renewable power sources by directly purchasing from a producer.
“The complexity of this process has created a barrier for smaller companies looking to integrate renewables into their energy mix and contribute to the growth of green energy development.”
He says that the company has heard from many generators and banks that the platform will allow the sector to move forward faster.
“There’s already been a lot of deals done in the Australian market with large generators and retailers, and now they’re running out of larger buyers, so the market aggregation will play a key role.”
Australia’s corporate PPA market going strong
From a purely financial standpoint Martynuik says PPAs are attractive for companies looking to mitigate the risk of a highly volatile Australian energy market.
This is helped along by the competitive nature of renewables in Australia thanks to the abundance of wind and sun – “it gives competitive prices in the long run.” This compares to the best spot for renewables in Europe, Spain, which has about the same amount of renewable energy capacity as Melbourne.
“The cost of consultation of solar assets is the same all around the word, so the more solar hours you have, the more competitive it is.”
But the influx of renewables brings “natural” challenges to the grid, he says. “And we are here to help solve it.”
He says the European market is bigger but slower to move on corporate PPAs. The US is also an active market for PPAs.