BlueScope Steel will procure 20 per cent of its Australian electricity demand from solar, after signing one of the country’s largest power purchase agreements (PPA).

The seven-year PPA will see BlueScope offtake 66 per cent of electricity generated from ESCO Pacific’s 133-megawatt Finley Solar Farm near Albury in NSW, which is expected to be online by mid-2019.

“This PPA is one of Australia’s largest corporate offtake agreements, and is the largest with a solar farm to date, and complements our firm electricity supply arrangements, which provide the reliable electricity supply we need for manufacturing processes that must operate 24/7,” BlueScope chief executive Australian Steel Products John Nowlan said.

He said the agreement would lead to cheaper energy for the company while supporting a gradual transition to renewables.

ESCO Pacific managing director Steve Rademaker said the agreement meant that the solar farm could start construction this year.

“ESCO Pacific strategically identified the site at Finley as an ideal location for a solar farm due to its high solar resource and direct connection to the existing TransGrid-owned Finley substation,” Mr Rademaker said.

“These factors were critical in helping deliver to BlueScope a cost-effective solar corporate PPA.”

Schneider Electric advised Bluescope on the PPA, and said it would reduce costs in the short term and volatility in the long term.

Schneider Electric managing director Gareth O’Reilly said Australian businesses had been left struggling with high energy bills, “with both wholesale electricity and [large-scale generation certificate] prices more than doubling between 2015 and 2018”.

The announcement was made at the Port Kembla steelworks on Friday, and was attended by NSW energy minister Don Harwin.

“I applaud the innovation, industry leadership and example set by BlueScope, ESCO Pacific and Schneider Electric in taking advantage of the opportunities of our evolving energy market as they enter into this historic agreement,” Mr Harwin said.

“This is one of many great opportunities for NSW industries to harness the power of our state’s abundant natural resources.”