ACCC proposes to authorise renewable energy joint purchasing group

17 June 2016

The ACCC has issued a draft determination proposing to authorise Melbourne City Council and 13 other parties to establish a joint renewable energy purchasing group, which they have called the Melbourne Renewable Energy Project. The ACCC proposes to grant authorisation for fifteen years.

The group’s objective is to jointly secure the construction of a new renewable-energy generation system, and to promote investment in renewable energy. They are seeking to achieve this by aggregating their demand for electricity into an electricity load that is large enough to support the development of a new renewable-energy generation system. This system would be connected to the National Electricity Market.

“Joining together to secure a reliable source of renewable energy will generate efficiencies compared to each member of the purchasing group sourcing electricity separately,” ACCC Deputy Chair Delia Rickard said.

“In particular, through pooling their demand the group is more likely to achieve the scale necessary to incentivise new investment in renewable energy.”

“The joint purchasing arrangement is also likely to generate transaction cost savings," Ms Rickard said.

In April 2016 the ACCC granted interim authorisation for the group to commence the tender process on the basis that the group would not enter into a supply agreement with the successful tender unless or until the ACCC makes a final decision granting authorisation. The tender is currently open with a closing date of 20 June 2016.

The ACCC is seeking submissions on its draft determination before making a final decision.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010 (Cth). Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Further information about the application for authorisation is available on the ACCC’s public register.

Background

The fourteen members of the bargaining group are Australia Post Corporation, Bank Australia (MECU Limited), Citywide Service Solutions Pty Ltd, Fed Square Pty Ltd, Melbourne City Council, Melbourne Convention & Exhibition Trust, Moreland City Council, NEXTDC Limited, National Australia Bank Limited, Port Phillip City Council, Royal Melbourne Institute of Technology, University of Melbourne, Yarra City Council and Zoological Parks and Gardens Board.

Release number: 
MR 108/16
ACCC Infocentre: 

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