Axpo saw in the new year by reinforcing its role as a leading provider of long-term power purchase agreements (PPAs) for renewable energies in Europe. Since 1 January 2022, the company’s German subsidiary has been supplying Nestlé Germany with electricity from wind power plants. This ensures that non-subsidised wind farms stay on grid and the world’s largest food group can produce its food and beverage products in Germany in a climate-friendly way.
Under the five-year agreement, Axpo Germany supplies Nestlé with power from German wind farms for the manufacturer’s locations. The electricity volume of around 50 GWh of wind power per year represents approximately 30 per cent of Nestlé Germany's power needs. Thanks to the extremely flexible PPA with Axpo, Nestlé Germany can also buy additional green electricity – including from third parties – and integrate it into the purchase agreement. Thereby, Nestlé was able to increase the share of wind power in its portfolio by an additional 30% already. This is particularly beneficial for German wind farm owners. Since last year, they have been selling their power production on the free market following the expiration of guaranteed state feed-in subsidies under the German Renewable Energies Act (EEG). Producers are now able to ensure the future operation of their installations while contributing to a successful energy transition.
As a result, Germany is seeing a strong PPA trend among wind power plant owners. The growing number of plants that no longer receive EEG feed-in remuneration has automatically led to an increased demand for market-based instruments to hedge long-term revenues from green electricity generation. On the other hand, industrial companies in particular are seeking to reduce their ecological footprint by procuring electricity from wind farms and solar plants.
Dr Thomas Kott, Head of Portfolio Management at Axpo Germany, comments: "As an experienced, pan-European PPA provider, Axpo systematically purchases electricity generated by renewable energies to develop bespoke and flexible supply solutions for industrial customers. We act as a mediator in this environment, bringing together plant owners and consumers. The agreement with Nestlé Germany is a prime example of this."
Anke Stübing, Head of Corporate Social Responsibility at Nestlé Germany, adds: "This power purchase agreement helps our German plants manufacture in a more climate-friendly way and is an important step in achieving our ambitious climate goals. By 2025, we intend to supply all Nestlé locations with electricity from 100 per cent renewable sources, such as wind and solar power."
Axpo has been trading energy in Germany, Europe’s largest power market, since 2003. Its German subsidiary, based in Leipzig and Düsseldorf, is among the leading marketers of wind and solar energy in the country, drawing on its long-standing experience in onshore and offshore wind farms. In addition to its PPA business, Axpo Germany's core expertise includes power and natural gas procurement and structuring for industrial companies, power plant operators and distributors.
More information about Axpo's PPA business can be found on our website.