Victoria’s Zero Emissions Water initiative
Zero Emissions Water is a partnership of 13 Victorian water corporations established to expand their access to renewable energy. We spoke with Yarra Valley Water’s Simon Prunster, Project Lead for the Zero Emissions Water (ZEW) initiative.
What is the ZEW initiative?
ZEW is a special purpose vehicle that enables participants to aggregate their renewable energy requirements to access the wholesale generation market. By brokering deals for 13 water corporations as a whole, ZEW provides each participant with access to cheaper rates and allows those smaller corporations with limited energy demands direct access to the corporate power purchase agreement (PPA) market. ZEW negotiates a fixed price contract for renewable power. Each participant is allocated the portion they have subscribed for, and these allocations are settled individually within the ZEW umbrella agreement.
What makes ZEW rates cheaper?
A fixed price contract with ZEW offers a potential supplier a guaranteed income stream with a strong credit rating. This provides the supplier with greater access to debt funding, and preferential lending arrangements. This can be critical for the financial viability of a new renewable power plant.
How is the supplier to ZEW chosen?
The ZEW contract was tendered in accordance with Victorian government purchasing rules. A shortlist, endorsed by the participants, identified four potential suppliers. Their bids were evaluated by a technical panel and Total Eren’s Kiamal Solar Farm was selected as the most suitable supplier.
Does the fixed cost include transmission?
No, the fixed cost is for renewable power only. Delivery costs are settled individually by each participant with their retailer.
How much money is saved by the ZEW model?
The ZEW supply arrangements commenced on 1 October 2019. Based on current quarter prices, expected savings are running close to $0.5m per month, and with hot weather may rise to $1m per month during the December to February peak period. Future savings estimates rely on modelling future power prices. Participants will purchase between 20% and 50% of their total power needs, representing a combined emissions reduction of 80,000 tonnes of carbon dioxide equivalent (tCO2e) per year.
What has helped ZEW achieve its objectives?
The water industry is in a unique situation – having strong technical capacity in an environment where the individual corporations do not compete directly. The industry also adopts similar, streamlined administrative arrangements. This has enabled participants to collaborate efficiently within a group model.
Can the ZEW vehicle do more in future?
There could be potential for ZEW to assist with other emissions mitigation activities, for example, by facilitating a scaled-up abatement project that would aggregate water corporation demand for carbon credits to offset for Scope 1 emissions.
This article is from the AWA Sustainable Development Goals Specialist Network’s April 2020 newsletter. To join the SDG network please add us to your member profile. Other articles from the April newsletter can be read via the links below.