25.04.2019 | Why Axpo sees great potential in the international PPA business

"Mediator between producers and consumers"

Once again, Axpo received very good ratings from its customers and business partners in the "Risk" and "Energy Risk" surveys. Perhaps also because the company meets the needs of its customers in many countries. There is currently great demand for socalled Power Purchase Agreements (PPAs): long-term power supply and purchase agreements are developing into a megatrend in the field of renewable energies.

Domenico De Luca, Head of Trading & Sales at Axpo, comments on the successful performance of his international teams - and reveals which products and services are particularly in demand among customers at the moment.

«Our experts know where the shoe pinches the customer.»

Domenico, congratulations! Axpo has once again received top marks from its customers and business partners - how do you explain that?
Domenico De Luca: We have had a clear strategy for years to expand our business internationally. We are now present in 28 countries and active in 39 markets. Everywhere we rely on the know-how of our local experts: they come from the countries in which they work, they know the characteristics of the respective market and they know where the shoe pinches the customer.

Where does the shoe pinch the most, what are the customers' needs?
Domenico De Luca: That varies from country to country, which is why it is so important that our people know the local situation well and understand what the customers are concerned about. What we see in many markets is a clear trend towards PPA. Power Purchase Agreements are becoming the measure of all things in the renewable energy sector.

Why are these PPA in such demand?
Domenico De Luca: More and more countries are reducing subsidies for renewable energies, more and more plants have to prove themselves on the market, more and more companies want to secure a long-term, cost-effective and reliable energy supply from renewable sources. In order to bring producers and consumers together, a mediator who understands both sides is needed. And that is what we are.

Are there any current examples of PPA?
Domenico De Luca: Our subsidiary Axpo Nordic recently signed several long-term purchase agreements for electricity from wind farms in Sweden. Since there are no subsidies in Sweden, it is all the more important for the operators of such plants to have a strong partner who can market the electricity profitably. There is also a lot going on in Southern Europe: In the Portuguese city of Évora, Axpo Iberia ensured by means of a long-term PPA that for the first time ever a solar plant could be built on the Iberian peninsula without any state subsidies.

«PPA are becoming the measure of all things in the renewable energy sector.»

Will the power purchase agreements continue to put Axpo at the top of the poll in the future?
Domenico De Luca: PPA are currently one of Axpo's biggest growth areas. We will see whether we will continue to get such good marks in the future. What I definitely know is that our people work hard, they are fully committed, they always want to be successful. And for that I thank them very much.

About the Energy Risk Rankings

Every year, the trade magazines "Risk" and "Energy Risk" ask some 1,500 market players and customers to assess counterparties in energy trading according to criteria such as price, flexibility, market-making, reliability, integrity and processing speed. Over the past years, Axpo has regularly figured among the top ranks in the individual categories.

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