Federal Government looks to lower risk for renewable energy projects


Renewable energy project developers who have been locked out of Australia’s $26 billion market for energy risk management will be allowed to compete on an even footing when the Morrison government gives them access to hedge contracts.


The Sydney Morning Herald is reporting the government has co-funded private firm Renewable Energy Hub, through the Australian Renewable Energy Agency (ARENA), to help wind, solar and battery storage companies compete for project investment on an equal footing with traditional coal and gas fired generators.


Traditional gas and coal fired power generators sell future ‘hedging’ contracts to manage financial risks. Power plants pump out consistent energy, and energy buyers who sell retail electricity are happy to sign year-long contracts that offer energy at a constant rate.

But that’s too risky for renewable generators and their variable power supply, which is why ARENA has supported a private firm to develop contract offerings that run for several years and factor in periods when the wind isn’t turning turbines, the sun isn’t powering panels, and batteries are dealing with fluctuating supply.


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