AHA NSW and Lion partner on major industry PPA

09 October, 2019 by Vanessa Cavasinni

Lion and AHA NSW have announced a new partnership that will bring pubs across NSW and the ACT a significantly better rate on their energy usage.

The deal – between AHA NSW, Lion and ENGIE – will establish the world’s first industry-scale aggregated Power Purchase Agreement (PPA) that will allow hotels to access electricity at a cheaper rate than current retail options.

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ENGIE’s retail arm Simply Energy is offering to supply eligible hospitality and accommodation businesses in NSW and the ACT with electricity for 10 years from 1 January 2020 using an industry-scale aggregation model.

AHA NSW and national president, Scott Leach, noted that the deal would ease some of the pressure operators are facing with energy costs, as well as help the industry become more sustainable.

“This is a ground-breaking arrangement which will help break the back of high electricity prices paid by our members and is a significant first step in moving the NSW hotel industry to renewable energy.”

Lion will also make use of the PPA in New South Wales, and managing director James Brindlay said he was pleased that the company could be a key partner in the deal.

“We are pooling our energy needs in the state, which includes our largest brewery Tooheys, together with the needs of participating NSW hotels. In 2020, this will see a typical hotel’s energy price drop from 11.5c/KWh to 6.9c/KWh – a 40 per cent saving, equating to around $18,000 a year.”

“Our customers are at the heart of this project, and Lion is focused on helping hotels right across NSW thrive. Like all businesses, pubs are feeling the pinch of rising energy costs.

“The PPA will see Lion’s carbon emissions in the state reduced by 40 per cent.”

Hoteliers from across the state – both in metro and regional areas – are set to take advantage of the PPA when it comes into effect next year.

“I think it is a great initiative by the AHA, and an example of thinking outside of the square. It doesn’t just benefit the top end of town but also the little guys in the bush,” stated David Barnhill of the William Farrer Hotel in Wagga.

Many operators are looking forward to reinvesting the savings made through the PPA back into other parts of their businesses.

“The cost of electricity has a substantial impact on the profitability of the business so you have to consider it when you purchase new equipment or make plans to renovate a venue or extend it,” explained Leon Colosimo of Momento Hospitality.

Dan O’Hara of O’Hara Hotels agreed, stating: “Reducing electricity costs will give us more money to invest into the community, to hire more staff and hopefully provide a better offering for our customers.”

A renewable component

Besides being an anchor partner, as part of the PPA, Lion will help underwrite the construction of ENGIE’s Silverleaf Solar Farm in Narrabri in regional New South Wales. Not only will this create more jobs in the area, but the renewable energy will also be used within the PPA.

“Lion’s participation in the world’s first industry-scale aggregated PPA demonstrates vision by Managing Director James Brindley – it is about working collaboratively with the broader industry to solve major problems such as energy supply. We welcome the support of Lion – one of our valued partners,” stated Leach.

The PPA deal was secured by the AHA’s joint venture partner, Clean Energy Strategies, who ran a tender process with more than 50 developers of new solar and wind farms.