Telstra has signed a contract to build a 70MW solar farm in north Queensland in a bid to cap energy costs, and as the first part of its long-awaited rollout of the Telstra Energy strategy, which may see it compete against major utilities.

The company says it has signed a long-term contract to buy the output of a new solar farm near Emerald, which will be built by RES Australia. In doing so, it is following in the footsteps of Sun Metals, the zinc producer building its own 116MW solar farm, and Monash University, which has tendered for a 40MW wind farm or solar farm.

All are investing directly in renewable energy to reduce their electricity costs, which continue to soar in Australia as network costs and wholesale prices rise unchecked.

The deal was unveiled by Ben Burge, who Telstra snapped from Powershop last year to head its new Telstra Energy division. He says it is an important step in Telstra’s strategy to more actively manage its energy consumption and costs, and to reduce emissions.

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“We are proud to be taking an active role in Australia’s transition to a lower emissions economy, complementing our long-standing energy efficiency and sustainability programs that saw our emissions intensity per unit of data fall by 56 per cent over three years,” Burge said in a statement.

“The Emerald project is part of Telstra becoming a more active participant in the energy market to reduce costs while at the same time building resilience in our network and contributing to a more stable energy system.”

Telstra is being coy about how many other contracts it may sign for solar or wind farms, but it expects the corporate PPA market in Australia to finally take off, as businesses understand that renewable energy is a cheaper option to the grid.

“This is about managing risk,” says James Gerraty, Telstra Energy’s head of strategy.

Meanwhile, Telstra is planning to invest heavily in solar at its exchanges and building across the country, and will aggregate its back-up generators to play in the wholesale market. But it appears to be backing off a push into the home solar and storage market.

Construction of the Emerald solar project will begin in the second half of 2017 and electricity generation is expected to commence in 2018.

This article was originally published by Renew Economy.

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