Axpo, Petrol ink first physical PPA in Slovenia

Swiss renewable energy producer and trader Axpo and Slovenian energy company Petrol have signed a five-year corporate power purchase agreement. It is the first PPA in the country for the physical delivery of electricity, to one of Petrol’s end customers.

The deal is Axpo’s second power purchase agreement in Slovenia. The first, a financial PPA, was signed in September 2023 with specialized industrial product supplier Kolektor.

Axpo said it would will supply electricity to Petrol under the agreement. The power will be used to support the company’s core activities.

According to the Swiss firm, the agreement will support Petrol in planning its long-term energy supply, securing a fixed average electricity price for the entire period. Petrol said a fixed average electricity price means more predictable costs for its business customers.

Petrol may choose to purchase additional tranches of power over time

As part of the agreement, Petrol has the option to purchase matching guarantees of origin (GOs) recognized by the Association of Issuing Bodies (AIB), from any AIB country, for solar, wind and hydropower.

In addition, the Slovenian company may choose to purchase additional tranches of power over time, giving it further flexibility and ensuring fixed prices in the long term, Axpo revealed.

Philip Schmid-Lossberg, Senior Originator for South-Eastern Europe at Axpo, said the agreement provides the company with the stability and assurance essential in business planning, protecting against volatile markets and energy prices through strategic hedging.

Bregar: By purchasing guarantees of origin customers can significantly reduce their carbon footprint

“As the largest electricity supplier to the business sector, we understand that long-term contracts, such as power purchase agreements, are highly valued by business customers, as they provide stable and predictable energy costs,” said Marko Bregar, Executive Director for Electricity Supply and Trading at Petrol.

By purchasing GOs, in his words, customers can significantly reduce their carbon footprint, aligning with their environmental, social, and governance (ESG) objectives.

Axpo is expanding its presence in the region. It signed its first commercial power purchase agreement in Serbia in May, for the purchase of electricity from the Krivača wind farm.

A year earlier it arranged a virtual power purchase agreement in Croatia with Kunovac, a joint investment between Finnish renewable energy fund manager Taaleri Energia and local developer Encro. It was its first PPA in the country.