PPA- type agreements for photovoltaic plants follow one another in the Iberian Peninsula. Now it is Axpo Iberia signing the first PPA for 10 years in Portugal, after Enérgya-VM, belonging to the Villar Mir industrial and real estate group, signed at the end of December another “Power Purchase Agreement” that will allow the construction of a photovoltaic plant in Murcia.
Although the PPA types of agreement – a private agreement between two parties that agree on the conditions of purchase and sale of energy for a long period of time – are common practice in other European countries, in Portugal it is a completely pioneering scheme and will mark the development of projects beyond reach of the regulatory framework for auctions in the coming years.
“In the past we had signed another similar PPA in Spain to cover a wind farm, although it was a simpler operation since it did not include bank financing,” said Ignacio Soneira, General Director of Axpo Iberia.
It is worth noting that the current project in Portugal is the first PPA that follows a financing model that includes the direct participation of a bank (Banco BPI SA), integrating the three main agents of the project -developer, financer and marketer- in a single agreement.
This PPA will allow the financing and installation of a 28.8 MW photovoltaic plant in the council of Évora (Portugal). It will cover a total area of approximately 50 hectares. The plant is owned by Dynavolt Renewable Energy Europe and is being developed by Hyperion who will maintain a minority stake.The Portuguese company Jayme da Costa will carry out the turnkey installation. Its commercial operation start is scheduled for mid-2019 and it will have an estimated annual production of 50 GWh, equivalent to the annual consumption of 14,000 homes.
Axpo will act as the plant´s selling agent in the Iberian electricity market providing a price guarantee until 2029 to allow its funding. “This type of project opens up a new path for the promotion of renewable energy,” notes Ignacio Soneira, “since it allows financing and therefore the installation of an exciting renewable photovoltaic energy project, with no need of any help from the electricity tariff, avoiding any type of public subsidy and thus benefiting the market, the consumer and the environment “.
As we already announced last week, the granting of licenses for almost 1,500 MW of production through photovoltaic projects with no tariff subsidy is pending by the Portuguese government, according to the confirmation by the Secretary of State for Energy of Portugal, Jorge Seguro Sanches to Efe.
In Spain, a PPA has also been recently signed between the British investment fund Foresight Group and the trader Enérgya-VM, belonging to the Villar Mir real estate and industrial group, for the development of a photovoltaic plant in Murcia.
Under this agreement, the construction of the Torre de Cotillas I (Murcia) project will be undertaken. With a power of 3,952 kilowatts peak (kWp), and an estimated annual production of 7,000 megawatt-hours (MWh), equivalent to the electricity supply of 3,000 homes, the plant will prevent the emission of 3.6 tons of CO2 into the atmosphere per year. Aaccording to Enérgya-VM, it will be built and operated by the construction company Solarig Global Services.