13.06.2019 | PPA from Axpo enables commissioning of huge solar park in Portugal

The sun is rising in Évora

The time has come: One of the first photovoltaic system on the Iberian Peninsula which does not require any public subsidies at all goes into operation. By means of a long-term power purchase agreement (PPA), Axpo is going to market the electricity generated in the huge solar park - and at the same time underpins its pioneering role in international business with solar energy.

After just under a year of construction, the Vale de Moura photovoltaic plant in Évora, Portugal, went into operation today. The solar park with an installed capacity of 28 megawatts (MW) is located in Évora, the capital of the central Portuguese region of Alentejo, 130 km east of Lisbon. On a total area of 55 hectares - the equivalent of 77 football pitches - around 50 GWh of electricity are generated annually, which corresponds to the average annual consumption of 14,000 households.

The newly completed solar park is a very special one: unlike comparable projects, it was financed purely privately because the key players - the local initiators of the project, the investors, the financing bank and Axpo Iberia - agreed in early 2018 in a joint agreement to implement the project with the help of a long-term power purchase agreement from Axpo.

Long-term price and purchase guarantee ensures breakthrough

Ignacio Soneira, Managing Director of Axpo Iberia, explains what is so special about the private financing of the solar park: "We have concluded a ten-year power purchase agreement for the park in Évora. This is the first time ever that such a long-term PPA has been signed in Portugal. The scope and volume of the business in this form are also unique throughout the whole Iberian Peninsula. The fact that a PPA enabled the construction and operation of such a large solar park is also a novelty from Axpo's point of view - and represented the final breakthrough for the project in Évora".

Axpo's long-term price and purchase guarantee for the solar electricity generated in Évora until 2029 is what made the entire project possible. Axpo will market the electricity on its own.

Ignacio Soneira continues: "This can be described as groundbreaking. The project developer Hyperion, the largest shareholder Mirova, Banco BPI and we at Axpo have implemented a pioneer project that will shape the development of similar construction projects in the field of renewable energies in the coming years."

Further business with photovoltaic systems targeted

It will also open up a new field of business for Axpo: "Évora will pave the way for the implementation of further long-term PPAs with producers and consumers of solar energy that guarantee more competitive prices and contribute to the development of renewable energies on the Iberian peninsula," says Ignacio Soneira. The power purchase agreement for the solar park in Portugal will probably also serve as a model for other markets, especially in Southern Europe, where the subsidies have always been much lower than in other regions. Axpo is planning to further expand its international business with solar energy.

In this context, it is highly convenient that PPAs are currently in demand among customers in many European markets: The long-term power supply and purchase agreements are developing into a megatrend in the renewable energies sector, as numerous countries are increasingly cutting their subsidies for the production of renewable energies such as solar and wind power. For producers, this means that the fixed feed-in tarif will be partially or completely abolished in the foreseeable future. As a result, the number of PPAs signed worldwide recently reached a new high. Axpo is one of the leading marketers of renewable energies in Europe and, by means of its PPAs, is helping to make renewable projects possible throughout Europe.

About Axpo Iberia

Since its founding 15 years ago, Axpo Iberia, with headquarters in Madrid, has been providing comprehensive energy solutions for producers, consumers and other energy market players, procuring energy for end customers and offering risk management solutions. All along, the focus has been on sustainable business in the area of renewable energies: Today Axpo Iberia is the most important wind power marketer in Spain and manages a portfolio of renewable energy production in the range of about 7,700 MW. The transaction for the solar plant in Évora creates the prerequisites for Axpo Iberia to conclude long-term power procurement agreements with other producers and consumers and, as a result, advance the expansion of renewable energies in Spain and Portugal.

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