09.02.2022 - Axpo, Switzerland’s largest producer of renewable energies and Europe's leading provider of power purchase agreements (PPAs), and Nestlé Switzerland are teaming up in their Swiss home market. For a period of 5 years, Axpo will supply Nestlé in Switzerland with green electricity from its Mauvoisin hydropower plant in the canton of Valais. Thereby, Axpo demonstrates its ability to play a key role in implementing complex physical PPA structures for industrial companies in the Swiss market.
Since January 1, 2022, until the end of 2026, Nestlé will be supplied with almost 100 gigawatt hours (GWh) of electricity per year from Axpo’s Mauvoisin hydropower plant. This corresponds to the cumulative electricity demand of Nestlé's factories in Basel, Konolfingen, Wangen, Henniez, Orbe, Broc and Sofinol, where the well-known Swiss brand products of Nescafé, Thomy, Leisi, Cailler and Henniez, among others, are manufactured. Thanks to this PPA, the food and beverages company leads the way by showing how industries can really support renewable power production and at the same time hedge themselves against future price uncertainty.
Eugenio Simioni, CEO Nestlé Switzerland, explained: “Nestlé's climate goal of achieving "net zero" by 2050 includes decarbonizing all our operations. The supply of 100% renewable electricity is part of this commitment. Thanks to this agreement, we know exactly where the green electricity that Axpo delivers to us comes from. This traceability and proximity give even more meaning to our actions”.
Unlike many other PPAs on international scale, the agreement inked by Axpo and Nestlé is not linked to a newly built renewable power plant, but to an existing one. With the decision to phase out the nuclear power plants in the country, it is important for Switzerland that hydro power plants, which provide around 60% of the country’s electricity, remain viable for as long as possible. Such long-term contracts help secure the selling price and can thus extend the life-cycle of the hydropower plants. Axpo’s Mauvoisin reservoir was built between 1951 and 1958 at an altitude of 2,000 meters in the Val de Bagnes in Valais. Its 250-meter high arch dam is one of the highest in Europe and attracts numerous visitors to its nature trail every year. With 212 million m3, the reservoir is one of the largest in Switzerland.
Domenico De Luca, Head Trading & Sales at Axpo, said: “We see an ever increasing demand of industrial companies in many European countries to cover their electricity consumption from renewable energy sources. Nestlé is taking on the role of a pioneer in green energy with this agreement, and we are pleased to be able to supply them with such an important part of their energy consumption”.
Laurent Nanzer, Head Origination Switzerland at Axpo, added: “The PPA market is at an early stage in Switzerland, as compared to other European countries. Axpo is already a PPA leader in Europe – so it is only natural that we also become a leader in our home country”.
One year ago, Axpo closed the very first PPA ever in Switzerland for the AlpinSolar plant at Lake Muttsee. The PPA now signed with Nestlé for the Mauvoisin hydropower plant is the next milestone and strengthens Axpo’s position as a leader and pioneer in the Swiss PPA market.
Long-term power purchase agreements are an important growth area in the energy sector and have become a megatrend throughout Europe due to cuts or elimination of government subsidies for renewable energies and the sharp drop in the cost price of new plants. The demand for PPAs and innovative energy services will continue to increase in the course of the rapid expansion of renewable energies. Axpo has in-depth expertise in the field of PPAs and supports numerous corporate customers in around 40 markets on their way to lower CO2 emissions.
More information about Axpo’s PPA business can be found on our website.
Photos of the Mauvoisin hydropower plant are available via visual.keystone-sda.ch.