Sydney Metro - Renewable PPA transaction advisor (commercial and technical)

CASE STUDY | 20 Aug 2020

Organisation: Energetics

Buyer: Government/Institution

State: New South Wales

Deal type: Wholesale

Technology type: Solar PV

Sydney Metro concluded a corporate renewable power purchase agreement in which electricity and Large-scale Generation Certificate (LGC) offtake agreements were secured with First Solar’s Beryl Solar Farm for a fixed volume that is equivalent to the forecast electricity use of 134,000 megawatt hours per annum[1]. The agreement is for 15 years, aligning with the Sydney Metro Northwest operator contract period. The 87 MW solar generation facility has around 260,000 solar modules on a 145 hectare site[2] near Gulgong.

The $8.3 billion Sydney Metro Northwest project is Stage 1 of Sydney Metro, Australia’s biggest public transport project[3]. Metro rail systems make an important contribution to reducing urban transport emissions, as they displace motor vehicles. The system has a capacity to move more than 40,000 people an hour in each direction and will run every four minutes in peak periods through eight new stations[4].

In recognition of Australia’s greenhouse emissions reduction challenge, the project announced its commitment in 2013 to fully offset greenhouse gas emissions from electricity use for operations.

Energetics was involved throughout the process. From developing options, assisting the business case and writing the request for expression of interest, through to advising on the contract model’s development, pricing model design, drafting of commercial terms, industry consultation and assessment of responses.

Energetics provided the in-depth understanding of electricity contracting and markets required by the Sydney Metro Authority to deliver the project.

Following the conclusion of the corporate power purchase agreement with First Solar, Energetics was also retained by Sydney Metro Northwest to advise on the selection of a retailer for the initial period of operation and to supporting their accounting advisor to assess the value of the hedge.

“With the help of electricity specialists, Energetics, Sydney Metro has been able to meet two important challenges in delivering the $8.3 billion Sydney Metro Northwest – offsetting the Greenhouse Gas emissions to ensure that the new Metro does not increase Australia’s Greenhouse Gas emissions and supplying the electricity needed to run the new Metro” – Stuart Hodgson, Sydney Metro (TfNSW)

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