Some of Australia’s most important infrastructure assets, including Port of Melbourne and Sydney Airport, have signed on to the final stage of the highly successful Australian Infrastructure Renewable Energy Program led by QIC and IFM Investors - two of Australia’s largest infrastructure fund managers1.
The program, valued at over A$700million, will facilitate the supply of 500GWh of renewable energy per annum once all the assets roll onto the program2. They will aim to help Australia’s critical infrastructure businesses in QIC and IFM’s portfolios save costs, reduce exposure to energy market volatility and cut emissions.
Launched in March 2022, Stage 1 of the program included seven critical infrastructure assets across New South Wales and Victoria - NorthWestern Roads Group’s WestLink M7, Transurban’s CityLink, Nexus Hospitals, Melbourne Airport, NSW Ports, Southern Cross Station and Ausgrid.
In November 2022, Brisbane Airport Corporation signed on for Stage 2 of the program.
Announced today, Stage 3 will see additional infrastructure assets sign on to the program, bringing the total size of the program to over 500 GWh per annum at its peak.
The assets signing as part of Stages 3 include:
- Port of Melbourne
- Lochard Energy
- Nexus Hospital
- Healius Limited
- Sydney Airport
- Adelaide Airport
- PRP Diagnostic Imaging
The energy suppliers for Stage 3 are Iberdrola and Squadron Energy, joining Origin Energy and Stanwell as suppliers to the assets who joined the program in Stages 1 and 2.
The multiple deals were structured by CORE Markets, an independent renewable energy, markets and sustainability advisory firm.
By 2025, the entire three-stage program is expected to save around 235,000 tonnes of CO2 annually. That is estimated to be the equivalent of reducing the carbon footprint of every home in a regional town the size of Ballarat in Victoria, or Toowoomba in Queensland, to zero.
The demand for renewable energy created by the program could also pave the way for further investment in renewable projects, helping to accelerate the greening of Australia’s energy grid and supporting the creation of hundreds of new jobs.
Demonstrating the success of the program, this Stage 3 group will surpass Stage 1 as the largest contracted load (in aggregate), as part of the largest multi-asset, multi-state PPA in Australia. It is also the first consortium to sign for green rights beyond 2030.
Six participating assets have net zero Scope 1 and 2 targets 2030 or before. These assets have made significant progress towards their net zero targets for Scope 1 and 2 emissions through a combination of participation in this program, as well as other sustainability initiatives such as constructing behind the meter solar farms, installing energy efficient lighting and using electric vehicles.
The program will also assist in reducing Scope 3 emissions. The structure of the PPAs has allowed assets to become approved renewable energy providers, meaning that on-site businesses, partners and retailers can choose that asset as their electricity supplier and renewable power provider For example, Melbourne Airport is the first airport in Australia to become an accredited GreenPower provider.
These net zero commitments also contribute to QIC and IFM’s own net zero targets, including the 2030 interim emission reduction targets for infrastructure announced by each company in 2022.
QIC and IFM Investors collectively manage over A$140 billion3 worth of infrastructure assets globally.
Quote attributable to Ross Israel, QIC Head of Global Infrastructure:
“Through this important renewable energy program, we are contributing to the net zero ambitions of some of Australia’s most significant infrastructure assets, while also reducing our assets’ exposure to energy market volatility and delivering cost-savings through renewable energy.”
“The renewable PPA is aligned to QIC’s decarbonisation investment thematic, where private capital will continue to play a critical role in funding pathways to achieve net zero targets alongside governments. This thematic has seen us grow our infrastructure platform to include some A$9.5 billion in investments supporting the transition to a low carbon economy, as we seek to mitigate the risks of climate change on our investors’ portfolios.”
Quote attributable to Michael Hanna, IFM Investors Head of Infrastructure Australia:
“Generating long-term returns for our investors and the working Australians they represent means managing and mitigating the risks posed by climate change.”
“This significant renewable energy purchasing program marks an important step for IFM’s assets and our own commitment to target net zero emissions. Importantly, it provides a blueprint to help more infrastructure assets switch to renewable energy and accelerate the sector’s emission reduction efforts.”
Quote attributable to Chris Halliwell, CEO CORE Markets:
“Congratulations to QIC and IFM. Not only for their climate leadership, but also for setting an example in renewable energy contract innovation. The multiple deals involved many moving parts and large aggregation volumes. They resulted in significant emission reductions with favourable commercial outcomes for each entity.”
Image: Port of Melbourne
