Mars Australia is going 100 per cent renewables, and will source all the power for its six Australian factories and two offices from a 200MW solar farm in Victoria.
Mars announced on Thursday that it has signed a 20 year power-purchase agreements (PPA) with Total Eren to produce the equivalent of all its electricity needs from the new Kiamal solar farm when it is complete in mind 2019.
Mars has contracted for energy – through the solar farm and a “firming contract” from TFC Green – to match the electricity requirements of its six Australian factories (Asquith, Ballarat, Bathurst, Wacol, Wodonga & Wyong) and two sales offices (Melbourne & Sydney).
“Mars is thrilled to be flicking the switch to solar energy,” says Barry O’Sullivan, the head of sustainability at Mars Australia, which makes confectionaries such as M&Ms, brands such as MasterFoods, EXTRA and Pedigree dog food.
“It’s about making a long-term commitment to a sustainable, greener planet that will benefit our customers, our consumers and the local and global community.”
O’Sullivan said the recent big rise in electricity prices in Australia accelerated its plans to join Mars sites in the US, UK and nine other countries in moving to renewable electricity.
“We acted quickly because the price volatility of energy in Australia made renewables the best option for our business, in addition to getting us closer to our commitment to eliminate greenhouse gasses from our operations by 2040.”
O’Sullivan said the company will also be talking to its extensive local supplier network “about how they can help further reduce emissions in our supply chain.”
It is the second innovative deal for the Kiamal solar farm, which is to be built near Ouyen in western Victoria.
Earlier this year,it announced a PPA with PowerShop,which enabled that retailer to announce a fall in retail prices to be passed on to consumers.
Total Eren, partly owned by one of the biggest oil companies in the world, also has council approval for a huge battery installation at the site – 100MW/380MWh– which the company will build once there is a “compelling proposition.”
Total Eren CEO David Corchba said the move by Mars Australia “sends a strong message to the rest of the market that now is the time to capitalise on the opportunities offered by renewable power purchase agreements.”
Total Eren says the success with the Kiamal solar farm means that it can no go ahead with a second solar farm in NSW.
Mars partnered with Commodity Risk Solution, LLC, a global energy market advisor, to structure and deliver an innovative corporate PPA that will provide a lasting economic advantage.
The deal was brokered by TFS Green, which has developed a new marketplace for buyers and sellers of renewable energy, along with new “firming” contracts, under a new product known as the Renewable Energy Hub.
Essentially, this allows renewables to be presented as transactional firm contracts to the wholesale energy market, and builds liquidity for renewables to function with the wholesale contract market.
“The future of the renewable energy market will require firming solutions for intermittent generators to transact advantageously, says Chris Halliwell, the head of renewable energy and environmental markets at TFS Australia.
The electricity from the solar farm will be exported to the main grid. Mars will receive the Renewable Energy Certificates (RECs) created by Kiamal Solar Farm, which are transferable for all Mars’ electricity use in all of its Australian facilities.
The PPAs are part of a broader Mars journey to become Sustainable in a Generation, with plans to reduce greenhouse gasses across the supply chain by 67% by 2050.
Giles Parkinson is founder and editor of One Step Off The Grid, and also edits and founded Renew Economy and The Driven. He has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.
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