14.08.2019 | The solar energy business is booming throughout Europe
Axpo Iberia has once again signed a long-term power purchase agreement (PPA) for a large solar plant in Portugal. The conclusion of this power purchase agreement in southern Europe fits seam-lessly into the series of recent announcements by Axpo and clearly reflects the quantum leap solar energy has recently experienced.
Whilst learning the four cardinal directions in school, most children, at least in the German-speaking regions, eventually come upon a saying that goes something like this: "In the east, the sun will start the day, then go along the southern way, till it will set in the west at night, from north you'll never see its light."
Surely no one would disagree that the southern sun radiates a special kind of energy and shines more often than elsewhere. However, even in the west, where according to the saying it merely sets, and north of the Alps, where it is supposedly never seen, the sun is very present, as the Axpo photovoltaic experts well know: The business with electricity generation from solar power has developed into an exciting growth market. So it comes as no surprise that Axpo continues to consistently develop its business activities in the area of solar energy throughout Europe – in all directions.
Axpo recently wrapped up numerous deals in the area of solar energy – the largest being the acquisition of the French photovoltaic company Urbasolar. That's no coincidence: Over the past years, France has developed into one of the most exciting solar markets.
"The year 2019 is clearly about solar energy and it is the beginning of a new era for us," says Christoph Sutter, Head of the New Energies division at Axpo. His declared goal is to use the new subsidiary as a platform to develop Axpo's solar business in Europe: "With the definite take-over of Urbasolar at the end of July we achieved an important milestone in our strategy. Now we will do everything possible to establish Axpo as an important market player in the area of development, construction and operation of solar plants in France and Europe – the way we have already successfully done so with our subsidiary Volkswind in the area of wind power."
Urbasolar is one of the leading companies in the French solar energy industry. The portfolio currently includes operating photovoltaic plants with a total installed capacity of 350 MW. Urbasolar also holds a development pipeline with over 1,000 MW and offers services in the area of repair, maintenance and asset management.
Christoph Bilshausen, Head of Origination at Axpo Deutschland, is at home further north than the new Urbasolar colleagues. He and his team in Düsseldorf and Leipzig have worked hard over the past weeks and months to implement the first PPA in the German solar market: "The fact that we were successful in concluding the first long-term power purchase agreement for solar power without state subsidies is extremely pleasing. This is the starting shot for a new business field because it is now possible to realise projects in the area of renewable energies in Germany without any state subsidies thanks to power purchase agreements."
In this particular case, Axpo Deutschland will purchase the power produced in a newly commissioned ground-mounted solar plant in Bavaria at a fixed price over the next five years and market it on a long-term basis. The 1.5-megawatt plant is located southeast of Munich, and produces about 1,570 MWh of electricity per year, covering the demand for some 450 average four-person households.
Axpo and the operator MaxSolar intentionally focused on a relatively small plant, explains Christoph Bilshausen: "We want to gain experience here and apply it to larger, more complex projects. The demand for PPAs has been rising steadily. In times when renewable energy subsidies are decreasing many investors and operators ask themselves how they can profitably realise their projects. The current developments with a clear PPA trend is making the German photovoltaic market more and more interesting."
This also holds true for Axpo: PPA brokers who build bridges between producers and consumers with their tailored solutions can hope for increased earnings.
Nearly 1,500 kilometres to the southwest, Ignacio Soneira, Managing Director of Axpo Iberia, the subsidiary for the Spanish and Portuguese markets, agrees with his colleagues at Axpo Deutschland: "PPAs are the key to success, especially in countries where subsidies are being eliminated or reduced, or where they were modest from the very beginning."
Ignacio Soneira knows what he's talking about: In June, one of the first photovoltaic plants on the Iberian Peninsula went into operation in the Portuguese city of Évora with no public subsidies. The project was made possible with a long-term power purchase agreement under which Axpo Iberia will market the power produced at the giant solar park for a period of ten years.
In comparison to the photovoltaic plant in Germany, the dimensions in Portugal are very different: The Vale de Moura solar park some 130 kilometres east of Lisbon has an installed capacity of 28 megawatts on a total area of 55 hectares – about 77 football fields – and generates about 50 GWh of electricity per year, corresponding to the average yearly consumption of 14,000 household
And there's more: The latest coup achieved by Ignacio Soneira and his team has already been sealed and demonstrates that Axpo remains strongly focused on the business with solar energy in Southern Europe. Together with the international investment company Exus Management Partners, which specialises in renewable energy projects, and BlackRock Real Assets, Axpo Iberia has just concluded a long-term power purchase agreement for a solar park that is currently under construction.
This time it is the photovoltaic plant Solar da Gloria in the town of Salvaterra de Magos in the district of Santarém, about an hour away from Lisbon. The 24-megawatt solar plant developed by Exus Management Partners and in which BlackRock Real Assets holds an interest will have an area of about 50 hectares and a yearly production of 46 GWh, corresponding to the annual consumption of 11,000 households while preventing CO2 emissions of some 12,000 tonnes per year. The plant is nearly the size of the giant solar park in Évora.
Commissioning of Solar da Gloria is scheduled for 2020 at which time Axpo Iberia will begin marketing the power from the plant over a time period of eight years. Ignacio Soneira comments: "With the PPA in Évora we implemented a pioneer project, and we were optimistic that this would shape the development of similar renewable energy construction projects in the upcoming years. Now we have made the next move in Salvaterra de Magos and realised another project on the same scale. It goes without saying that we want to build on these successes."
Proving that the saying about the cardinal directions holds true: The sun goes along the southern way - which is why the southern countries are the pioneers in the solar energy business.