Encavis AG signs long-term power purchase agreement (PPA) for 10 years for Spanish solar park Talayuela (300 MW capacity)
- Successful entry into Spanish growth market for private-sector power purchase agreements (PPAs)
- Start of further expansion into the Spanish electricity market in partnership with British project developer Solarcentury
- Encavis participation Pexapark (Zurich/CH) acts as PPA advisor
Hamburg, September 17, 2019 - ENCAVIS AG (Prime Standard, ISIN: DE0006095003), the Hamburg-based SDAX-listed renewable wind and solar energy company, has signed a long-term power purchase agreement (PPA) with a leading international energy company for ten years for the largest solar farm in the company's history near the Spanish city of Talayuela. With a generation capacity of around 300 MW, this plant is one of the largest solar parks in Europe.
ENCAVIS is implementing a solar project in Spain with the long-term private-sector power purchase agreement without any state feed-in tariff. ENCAVIS is thus transferring the already successful practice of Power Purchase Agreements (PPAs) with industrial customers in the wind market to the high-growth solar market. The total quantity of electricity agreed over the term of the contract is 4,300 Gigawatt-hours (GWh). The customer is an internationally leading energy company with a strong credit standing, an investment grade credit rating and operations in more than 40 countries. As contractually agreed, business conditions regarding to the fixed purchase price for 10 years and the name of the contractual partner may not yet be stated.
The investment volume, including project-related debt financing, amounts to around 225 million euros. The project developer Solarcentury itself will participate in the investment with 20 percent. The plant is scheduled to be connected to the grid towards the end of the third quarter of 2020. Encavis expects the photovoltaic system to generate annual sales of around 25 million euros from the first full year of operation. The expected return on investment will be above the average yield of Encavis‘ total portfolio. The project is financed by a renowned consortium of banks. The Swiss Encavis participation Pexapark acts as PPA Advisor.
‘The first long-term power purchase agreement (PPA) signed for a solar park without any support from feed-in tariffs is a milestone for Encavis with a clear signal effect for further contracts of this kind and supports our consistent growth strategy in this market segment,’ said Dr. Dierk Paskert, CEO of Encavis AG, welcoming the signing of the agreement. ‘The conclusion of this PPA and the launch of this park next year will take Encavis to a new level, just as it will stimulate the market for comparable contracts in many countries,’ Paskert continued. 2 / 2
PPA - three letters are changing the industry around the world:
Power Purchase Agreements (PPAs) are contracts between an electricity producer and a private buyer that regulate the long-term purchase of electricity from renewable sources at a fixed agreed price. These agreements, which are familiar from conventional power plant operation, are not yet so widespread in Germany for renewable energies, but are meeting with lively interest from energy suppliers, generators and industrial customers and will fundamentally change the development of the entire renewable energy sector. ‘The market will change from a subsidy market to a customer market and will be driven by the large demand for green electricity,’ Paskert explains the long-term effects on the industry.