Westpac has signed a power purchase agreement (PPA) with Bomen Solar Farm to source 63 gigawatt-hours of renewable electricity annually to power its operations globally.

The PPA follows Westpac’s pledge to source 100 per cent of its energy from renewable sources by 2025, joining a growing band of big businesses moving away from traditional power sources amid the global push to a lower carbon economy.

Head of Westpac’s Energy and Utilities property team, Ceri Binding, said “One of the most exciting things about the PPA is that we’re effectively underwriting the development of a new solar energy facility.

“It will create incremental renewable energy capacity, generating enough electricity to power the equivalent of 36,000 homes, and employment opportunities in the local area.”

In simple terms, the PPA will see Westpac pay Bomen Solar Farm for an amount of renewable energy it will put into the grid, and the equivalent amount consumed by the bank will be recognised as having zero emissions.

“The PPA would deliver 45 per cent of the bank’s 100 per cent clean energy target by 2021 and a range of options including rooftop solar installations on its larger buildings and further supply agreements would be assessed to hit the 2025 target,” Ms Binding said.

“It is economically the right thing for Westpac to do.”

Against a background of sharply rising electricity prices, particularly since the closure of the Hazelwood coal-fired power plant in Victoria in 2017, corporate Australia’s desire for more certainty and lower energy prices has contributed to a sudden spurt in the corporate PPA market. Since taking off in 2016, almost 30 PPAs have been signed – including those by Telstra and BlueScope – supporting solar and wind projects with a combined capacity of nearly 3600MW, according to carbon management consultancy Energetics.

These have contributed to the recent surge in clean energy projects, despite ongoing commentary about the years of energy policy uncertainty that flared up again last year with the collapse of the Federal Government’s National Energy Guarantee.

According to the Clean Energy Council, more than $20 billion was committed to around 80 large scale wind and solar projects in 2018, double the value of the previous year, and one in five Australians now have rooftop solar. This lifted renewables generation to 21 per cent of Australia’s total power pool last year.

Westpac’s declaration to become 100 per cent renewable sees the bank join 171 other companies globally to have signed up to RE100 – a global initiative launched in 2014 by The Climate Group in partnership with CDP to bring together businesses that have made the same public commitment. Other Australian members include Atlassian, Bank Australia and Commonwealth Bank.

The global head of RE100, Sam Kimmins, said “The growing number of Australian companies joining RE100 sends a powerful signal that businesses want an energy system fit to support a clean economy.

“By setting a 100 per cent renewable electricity target, companies leave no room for doubt.”

The Bomen Solar Farm project, to be operated by listed utilities player Spark Infrastructure, will feature high-efficiency photovoltaic modules expected to produce more than 240 gigawatt-hours of renewable energy each year – or enough to power the equivalent of all the homes in the local Wagga Wagga region. Westpac marks the project’s second PPA, having signed up with FlowPower in December.

Ms Binding said the bank chose the Bomen Solar Farm project and partnership with Spark Infrastructure as it ticked boxes not only in regards electricity supply, but also social outcomes for the local Wagga Wagga community, including a community fund to develop student scholarships, youth facilities and vegetation and habitat regeneration.