As part of this week's topic of the week, today we bring you an example of how PPAs can make a difference:
Solarcentury together with the solar and wind operator Encavis, has announced the signing of a financial Power Purchase Agreement (PPA) for Talayuela Solar; the 300 MW project in Cáceres, Spain. Talayuela Solar is being built without subsidy and the power from the plant will be sold on the open market. The swap that has been signed is a financial instrument which hedges the off-take price for approximately 75% of the volume of production ensuring both a secured stable income for the first 10 years of operation and the bankability of the project.
PPA structured as hedge of the capture price
The PPA is based on industry standard documentation published by the International Swaps and Derivatives Association (ISDA), more commonly used to hedge financial interest rate or currency risks and has been tailored to the Talayuela Solar project. The PPA is structured as a hedge of Talayuela Solar's capture price rather than base load price, thus providing an optimal as produced hedge for the Talayuela project revenues.
The PPA counterparty is a leading international energy company with a solid investment grade credit rating and a pan-European asset base, active in more than 40 countries and with a proven track record in financial hedges.
Push for subsidy-free PV in Europe
Jose Miguel Ferrer, General Manager of Solarcentury in Iberia said: “PPAs of this nature are still extremely new and rare; the signing of this contract is the culmination of a significant amount of work that will help lay the track for the expansion of subsidy-free solar in Europe.” Solarcentury has a 1 GW pipeline in Spain and a 5 GW pipeline globally.
At 300 MW, Talayuela Solar will be one of the most powerful solar projects in Europe. The solar energy produced is enough to power 150,000 homes for an entire year (enough to power all the homes in Badajoz). The plant has been developed by Solarcentury in conjunction with Kompa Solaire Sasu and Genia Global Energy Solutions, SL. In October 2018 80% of the plant was sold to Encavis AG with Solarcentury retaining a 20% stake.
Grid connection expected middle of 2020
The connection to the grid is already completed, all permits are in place and Solarcentury is expected to start construction in the Autumn. The plant is expected to be connected to the grid by the end of the second half of 2020. (HCN)
Here, in case you missed them, are Part 1, Part 2 and Part 3 of our current series.
