Overview
Given the news coming out of COAG's meeting today that
further negotiation on the design of the NEG will take place, it is
timely to consider whether the PPAs of the past are "NEG
Ready" and the current evolving approach to NEG under PPAs
entering the Australian National Electricity Market
(NEM).
The NEG proposes to mandate that electricity retailers and some
large customers who purchase electricity directly from the NEM will
be required to meet both reliability and emissions reduction
requirements.
As the NEM is an energy-only market, "in front of the
meter" PPAs in NEM-connected projects are typically structured
as financial contracts and do not provide for physical supply.
However, with the increasing uptake of corporate PPAs, the typical
financial contracts between generator and purchaser may also be
supplemented by standard or bespoke retail arrangements.
