Australian supermarkets have begun warring over renewable energy as Coles plans to build 3 solar power plants

• Coles has announced it and solar panel company Metka EGN will build three solar power plants in regional New South Wales to help the supermarket meet 10% of its power needs with renewable energy.

• The development comes as Coles ramps up its efforts to compete with rival Woolworths on green energy, an emerging point of contention between the two.

• That's seen each of the supermarket giants take major steps towards cutting their electricity consumption and generating more solar energy to power their stores.

---

After fighting tooth-and-nail over milk prices, the supermarkets have found an unlikely new battleground: renewable energy.

Solar power has emerged as the weapon of choice, with Coles announcing on Tuesday that it will build three solar power plants in regional New South Wales with enough capacity to power nearly 40,000 homes.

Under the terms of the 10-year contract it signed with renewable partner Metka EGN, Coles will buy 70% of the power generated -- enough to account for 10% of the supermarket chain's national consumption.

"We are thrilled that with this agreement, Coles can make a significant contribution to the growth of renewable energy supply in Australia, as well as to the communities we serve," Coles CEO Steven Cain said in a company announcement.

Construction is scheduled to begin in September with the power supply expected to be ready by July next year. Coles said it is also committed to generating solar power on-site at different supermarkets around the country.

“We plan to install solar panels on another 38 stores this financial year and we will be working with our landlords and property developers to identify further locations suitable for on-site solar power generation,” chief property officer Thinus Keeve said.

It comes just a few months after rival Woolworths fired the first major shot -- raising $400 million to undertake its own green energy projects. Armed with the money, Woolworths has pledged to use solar power at 100 different sites in Australia by the end of the year.

So far panels have been rolled out at regional stores including Moree and Young.

The two major supermarkets appear to now be engaged in a renewable arms race as each tries to outdo the other. Cain said Coles had already made many changes to its stores in recent years.

"We have already made changes throughout our business to use energy more efficiently, which has enabled us to reduce our greenhouse gas emissions by 4 per cent over the past financial year and more than 30 per cent since 2009, despite growing our store network," he said.

"Over the past two financial years alone we have invested more than $40 million in energy efficiency measures including upgrading all store lighting to LED by the end of 2019 and the installation of solar panels on 30 stores."

Meanwhile, Woolworths has embarked on a reduction of its power use, largely through the installation of LED lighting in more than 800 stores. It claims that measure alone has collectively offset its powers consumption by the equivalent of 50 entire stores.

Unlike the milk wars, which saw the two supermarket behemoths squeeze Australian farmers, a competition to reduce the carbon footprint of Australian supermarkets is a win for everyone, no matter the victor.