In 2021, Darebin Council spearheaded the Victorian Energy Collaboration (VECO), the largest emissions reduction project ever undertaken by Australian local governments.
This case study demonstrates that large scale collaboration is possible to transition to a renewable energy future and address climate change.
Why Darebin Council spearheaded the Victorian Energy Collaboration
Most Victorian Councils traditionally procured their electricity through conventional 2-3 year fixed-price retail contracts. These contracts were exposed to the significant price volatility of the energy market. Any purchases of renewable energy (e.g. GreenPower) were often on a short term or ad-hoc basis, expensive, and rarely taken up.
Darebin’s project team looked to provide an alternative model that secured a longer-term agreement that incorporated 100% renewable electricity at a better price than ‘business as usual’. Out of this ambitious goal, the Victorian Energy Collaboration (VECO) was born. VECO is the collective effort of 46 councils to switch to renewable energy under a long-term supply contract. The project was led by Darebin City Council, supported by officers from a range of Councils and by the Victorian Greenhouse Alliances, established by local government across the state.
How Darebin Council facilitated the power purchase agreement
In 2018, Darebin invited Victorian councils to form a group to develop a business case. During 2019, the business case clearly demonstrated the value in purchasing renewable energy from an electricity retailer, as a collective. In 2020, Darebin invited Councils to participate in a joint procurement process for a new electricity contract, with 46 Councils signing up!
With these crucial group elements in place, Darebin managed the procurement process on behalf of the Buyers Group. The new contract commenced on 1 July 2021 with supply linked to two wind farms located in regional Victoria.
VECO is the result of nearly three years of work. The key ingredients to success were:
- Building and maintaining trust with project partners
- A strong governance framework
- Organisational-wide capacity building of all members
- Actively seeking feedback from all stakeholders
- A willingness to change
- Taking a group perspective.
Victorian Energy Collaboration (VECO) benefits
VECO represents nearly 60% of all Victoria local governments, making it the largest emissions reduction project ever undertaken by the local government sector in Australia. By switching to 100% renewable energy the project will be procuring 240GWh of electricity, saving 260,000 tCO2-e, or the equivalent of taking 90,000 cars off the road or powering 48,000 households!
VECO will power council assets like town halls, sports grounds, community venues, leisure centres and streetlights. Many of these facilities have provided the community and groups that occupy and operate these facilities 100% renewable electricity that they would not otherwise be able to secure themselves.
Some of the other features of VECO that benefit both Council and the broader community include:
- By working together, VECO Council’s were able to secure a great price. Final pricing was modelled and found to be better than business as usual, equating to an estimated $4.1 million of savings over the life of the contract.
- Linking the electricity supply to two wind farms means the project will be supporting additional renewable energy supplies in the grid.
- Considerable socio-economic and community value add for the regions where the wind farms are located, as well as Victoria more broadly.
VECO is a clear example of how strong partnerships and collaboration are essential to driving an outcome that met the needs of such a large and diverse group of local councils.
Darebin Council was a winner in the Collaboration category in the Cities Power Partnership Climate Awards 2021.
