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Australian Vintage signs landmark renewables PPA for winery

The wine maker has agreed a 10-year PPA with Flow Energy for more than 9,000MWh of power each year at its New South Wales asset.

Wine producer Australian Vintage has signed a large-scale power-purchase agreement with renewable energy provider Flow Power for its largest winery at Buronga Hill, New South Wales.

Australian Vintage said in a statement that it is the first wine producer to sign a “large-scale hybrid” PPA like this, meaning that the power will be provided by a mix of wind and solar.

The agreement will see Flow Power provide 9,158MWh to the wine maker annually over 10 years, equivalent to the energy needed to power 2,200 homes each year.

Australian Vintage, which produces brands such as McGuigan Wines, Tempus Two and Nepenthe, has already installed a privately owned solar system at its Buronga Hill winery in what chief executive Neil McGuigan told Agri Investor was a “huge investment.”

The solar facility provides 30 percent of its power requirements, while the PPA with Flow Power will provide 60 percent of the winery’s needs, taking the proportion of its energy derived from renewable sources up to 90 percent in total.

McGuigan said the deal would help to insulate Australian Vintage from the “soaring price of traditional power sources.” Rising energy costs in Australia are having an increasingly large financial impact on agribusinesses.

Bolstering the wine maker’s sustainability credentials was the prime motivating factor for the deal, though, McGuigan said.

“We’re committed to the green agenda and exploring ways to cut our emissions for a more sustainable future. The fact that 90 percent of the energy used at our largest winery is going to be produced from sustainable sources shows just how important renewables are to our wine-making,” he said.

“We will continue to find further opportunities to build on the landmark hybrid renewable PPA even further and have a raft of sustainable projects under way throughout the business to drive our green credentials.”

He added that both investors and customers expect companies to have “robust plans” in place on sustainability and that his company had set itself “ambitious” targets it was on the way to achieving.

Australia’s energy sector has suffered a year of uncertainty that culminated in the dumping of the National Energy Guarantee by former prime minister Malcolm Turnbull days before he was ousted by his own party. The failure to agree on a bipartisan energy policy was met with dismay by many investors, but the opposition Labor Party has signaled an intention to revive it should it win power in 2019.

McGuigan said he also hoped to see progress on energy policy in future: “We have an active dialogue with government on a variety of issues which underpin our ability to operate ethically and sustainably. Like other industries, we welcome any positive steps that are made to improve policies and create fairer legislative conditions.”

Flow Power has signed a range of PPAs to take power from several wind and solar farms in eastern Australia, which it then sells on to corporate customers such as Australian Vintage. It most recently agreed to buy 50MW of the output of the 270MW Sapphire Wind Farm in NSW and has previously contracted to buy 70MW of power from the Ararat Wind Farm in Victoria, 50MW from Lakeland Wind Farm in northern Queensland, and 50MW from Kiamal Solar Farm in Victoria.

The Sapphire agreement in October took its commitments to 220MW and managing director Matthew van der Linden signalled an intention to reach 300MW to 400MW of total capacity by the end of 2018, sister publication Infrastructure Investor reported.

It is not clear which assets will be used to provide power to Australian Vintage or if any further deals have been signed since October. Flow Power has been contacted for comment.

Australian Vintage exports wine globally, with its largest markets being Asia, the UK and the US. It recently announced profits had increased year-on-year by 79 percent.