Alternative energy procurement approaches for councils

Point Advisory recently developed a guide for councils to help them identify and implement alternative energy procurement approaches that are best suited to their unique circumstances. This project was delivered for the Central Victorian Greenhouse Alliance (CVGA), with support from the Collaborative Councils Sustainability Fund.

Local governments, like most organisations, continue to face uncertainty in the Australian energy market due to technological shifts, regulatory upheaval and disruptive commercial models. Traditionally, councils have purchased electricity through aggregators that procure energy on their behalf. However more recently, new energy procurement options have emerged. For instance, councils can procure energy via corporate Power Purchase Agreements (PPAs), facilitate development of large-scale renewable energy generation on council land, or generate their own energy behind-the-meter. Of course, such alternative approaches may require additional resources and capabilities within council to understand different contractual arrangements, manage the various risks involved, and develop and analyse the business case for often longer contracts. It is therefore important to methodically select the right approach.

The guide, titled Energy models for councils – a decision maker’s guide, was developed through extensive consultation with council procurement staff, executive managers, sustainability staff, and external community energy groups and energy project developers. The guide contains a decision-making framework that help councils develop their energy procurement strategies so that they align with these strategic objectives and geographic realities. The framework enables councils to select and develop their preferred business procurement or generation model. The guide also contains information in relation to the pros and cons of each model, resourcing and capability requirements, and the next steps once a selection has been made.

The guide can be found at here.

The CVGA supports a collection of councils across central and northern Victoria to develop climate change mitigation and adaptation activities. Visit the CVGA website for more information.

Please contact Charlie Knaggs, Principal – Energy & Climate Change to learn more about how Point Advisory can assist you in evaluating your organisation’s energy procurement practices. This could include investigation of alternative energy procurement methods such as PPAs, renewable generation projects, and community co-investment business models.