Private Sector Joins Up To Unlock New, Large Scale Clean Energy Generation

A new private sector-led initiative is aiming to boost the number of multi-million-dollar power deals in New Zealand’s corporate sector, increasing clean energy capacity, and enhancing energy security.

The collaboration between the BusinessNZ Energy Council, Sustainable Business Council, EVAmarketplace, the Employers and Manufacturers Association, and DLA Piper is raising industry awareness of the potential of Power Purchase Agreements (PPAs) in New Zealand and exploring new tools to support uptake.

PPA agreements involve pre-purchasing power over a 10-20 year-period by medium to large energy users, including manufacturers, commercial buildings and others.

Tina Schirr, Executive Director at the BusinessNZ Energy Council, says the agreements make new generation more commercially viable by incentivising the development of new renewable projects and will help give certainty to business customers.

"Aside from security of supply, businesses are also looking to reduce their carbon footprint to help meet demand from their customers and meet 2030 targets," said Schirr.

"Significant reductions in costs are possible too - but you have to ride out the ups and the downs."

The market has been on the rise in Europe for some time with deal count peaking at 272 published PPAs in 2024, representing a 65% increase from 2022.

Tom Metcalfe, a senior lawyer in DLA Piper's international renewables practice, offered insights on growth in the European market at a recent industry meeting. Hosted by the Employers and Manufacturers Association, the workshop was attended by more than 100 participants from across the energy sector.

"We have seen volatility in energy prices lead to a sharpened focus on energy procurement strategies and the potential benefits of price hedges in the European market. There is clearly potential for New Zealand too against a backdrop of high wholesale power prices," said Metcalfe.

"Another important part of the PPA market is the sale and purchase of environmental attribute certificates. So having a robust system for the transfer of traceable certificates is key."

Mark Williamson, Partner at DLA Piper in New Zealand, highlighted additional drivers for the growing momentum of PPAs globally.

"Regulatory incentives, and corporate sustainability commitments have also contributed to the uptake in Europe," said Williamson.

"These agreements are proving to be a key mechanism for unlocking large-scale renewable energy projects, and a vital part of achieving the Government's goal to double New Zealand's renewable electricity generation."

Antonia Burbidge, Head of Climate and Nature at the Sustainable Business Council, said there are some successful local examples of large-scale, long-term deals currently in play domestically.

"Lodestone Energy for example, has been a market leader," said Burbidge.

"It is fantastic to see information sharing happening related to process, for example, the need for early engagement with lenders. In other cases, it’s what you can expect in terms of outcomes such as reporting or helping achieve Scope 1, 2, and even Scope 3 emissions targets - which has been tricky territory for many."

Off the back of the industry workshop new resources including a legal template are underway to support market delivery.

"Our next step is a standardised corporate PPA template to simplify the process and reduce legal costs - a common barrier to entry. This is expected to increase market liquidity, and could significantly benefit New Zealand’s economy," said Schirr.

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