Orora has signed an agreement that will see the company's South Australia energy requirements met by Pacific Hydro's Clements Gap Wind Farm.
For an energy intensive business like Orora's glass bottle manufacturing operation in Gawler, South Australia, the high cost and unreliability of energy supply are potentially crippling, and solving this problem has been a high priority for some time.
As previously reported by PKN, Orora CEO and MD Nigel Garrard has been outspoken on the issue of energy supply in Australia, because of the extent that high energy costs impact both its South Australia glass manufacturing business and its Botany, NSW, recycled paper mill. He has urged politicians to put state and partisan politics aside and maintain the sense of urgency around resolving the crisis that affects industry and consumers nationwide
Now Orora has moved ahead and made its own plans. At Orora's half year (to December 17) results announcement in Sydney yesterday, Garrard announced a long term power purchasing agreement with global renewable energy provider Pacific Hydro to supply wind-generated electricity to Orora's South Australia operations, including the glass facility at Gawler.
In terms of the agreement, Clements Gap Wind Farm will be supplying Orora's total electrity demand in South Australia, and the deal includes "innovative risk sharing arrangements" in place to protect Orora from variable market prices in the state.
Garrard said safeguarding energy supply and managing its cost for the Australian operations was a chief concern for the business.
He said the company has adopted a two-pronged approach to solving the challenge: on the one hand an internal focus on reducing the energy intensity required in the processes (at both the glass plant and the recycled paper mill) – and Garrard reports the company is close to achieving the targeted 10% reduction; and on the other hand to source a competitively priced, reliable supply of renewable energy, which it has now found for South Australia operations through the agreement with Pacific Hydro.
"Renewable eneregy represents a competitively priced and sustainable energy source and this agreement provides Orora's SA operations with greater energy price certainty over the long term," Garrard said.