Publicly-owned renewable energy assets that sell cheap electricity could be an alternate to green loans and underwriting deals for heavy and advanced industries, a new report says, and it has union backing.
The free market for electricity is failing energy-intensive industries, say the McKell Institute’s Allison Pennington and Thomas Probst, who argue in a research paper that commercial projects are not, and cannot, supply electricity to heavy industry cheaply enough or under long enough contracts.
The solution is what they’re calling “Sovereign Power”, a federal government-owned entity which would own generation and storage assets and offer long-term power purchase agreements (PPA) to industry.
Based on CSIRO modelling, they’re suggesting PPAs could sell power at a cost price of $66 per megawatt-hour (MWh), compared to average private market PPAs of $117/MWh.
Pennington says the energy assets that backstopped Australia’s industrial past are coming to the end of their lives, and the market has nothing to replace them with.
