Australian utility Powershop drops rates 5% thanks to new hydro, wind, solar assets

On the back of Meridian Energy Australia’s acquisition of three NSW hydro power stations, and the signing of PPAs with two wind farms, and the 200 MW Klamal Solar Farm in Victoria, its retail arm has commenced a program of rate reductions. Victorian Powershop customers are the first to get a rate decrease, with New South Wales and Queensland customers to follow around mid-2018.

The price reductions are a part of Powershop and Meridian’s “mission” to demonstrate that renewable generation assets can deliver lower prices for consumers, said CEO Ed McManus in announcing the Victorian rate decrease. He said Meridian’s growing fleet of renewables allows the company to better manage the company’s customers’ exposure to high wholesale power prices.

“The price that we get the energy from these new wind and solar farms is cheaper than the energy we can get from the normal wholesale market day to day,” said Powershop Australia CEO McManus, in a video posted on Youtube. “We can take benefits on lower costs onto our customers in terms of cheaper rates.”

Meridian Australia announced the purchase the Hume, Burrinjuck, and Keepit Power Stations in February. All three are in NSW and were acquired through purchasing 100% of the shares of GSP Energy.

Alongside the hydro capacity purchase, Meridian signed PPAs with two wind farms, the 54 MW Salt Creek (Vic) and 135 MW Crudine Ridge Wind Farm (NSW) – which are expected to be completed in mid-to-late-2018 and 2019 respectively.

At the same time, Meridian signed a PPA for the 200 MW Kiamal Solar Farm Stage 1, which is being developed by French firm Total Eren. The project is Total Eren’s first Australian project. The PV power plant is said to be in “advanced development” and is due to be completed in mid-2019. Kiamal is to be built at a site in North-West Victoria.

“The [retail] price drop [in Victoria] is around 5%, which means for the average customer it is around $70 a year, and all of that is thanks to renewable energy,” said Powershop’s McManus in his Youtube statement. “NSW and Queensland have a price change in the middle of this year. That coincides with the time that we start to get energy from the new NSW wind farm [135 MW Crudine].”

Powershop launched in 2014 and claims to have 100,000 customers. CEO McManus says the company will put more renewable energy into the grid than its customers consume.

The model presents a compelling proposition for pro-renewable householders. “The more people join Powershop the more we will be able to continue to invest in renewable energy,” explains McManus.

Powershop claims to operate or have contracted 1,300 GWh of renewable generation capacity in Australia to date.