Renewables developer nextE said it signed a corporate power purchase agreement for its 51.5 MW photovoltaic project to supply electricity onsite to one consumer, which it didn’t identify. It is the largest contract of its kind in Romania, the company claims.
Aiming to prevent the impact of price volatility on the electricity market, companies in Romania have started to turn to power purchase agreements (PPAs), which in turn attracts investments in wind and solar power plants.
The Switzerland-based Connect44 Group’s member company nextE said it earmarked EUR 35 million for the installation of a photovoltaic facility of 78.000 panels with a 110/20 kV substation in Romania. It will be built on the site of an unnamed consumer in the commercial and industrial (C&I) sector with which it signed a long-term corporate PPA, according to the announcement.
Solar power unit to be owned, operated by nextE
The photovoltaic plant is envisaged with a peak capacity of 51.5 MW and a 42.9 MW connection. According to nextE, it is the largest onsite solar C&I project in Romania. The company said in November that it completed one onsite solar power plant in north Romania under a PPA.
The agreement was made under the energy-as-a-service (EaaS) model, under which nextE works, focusing on large consumers. It means it also owns and operates the power plant either onsite or away from the consumption point.
The project location spans 50 hectares, the independent power producer said. It revealed that cattle grazing would be allowed to continue at the site. The company added it has projects of 160 MW in peak capacity in different stages of development and that it aims to deploy 500 MW in peak terms in Romania by 2027.
Ten-year break in market for long-term PPAs
The consumption of green energy where it is produced avoids transmission and distribution issues and secures the supply. In a PPA, in this case a corporate or private PPA, the price is fixed or indexed. The idea is that the contracting parties find a reasonable level, shielding themselves from fluctuations.
Long-term PPAs were banned in Romania from 2012, after they drove state-owned hydropower plant operator Hidroelectrica to insolvency, to 2020. The deals can be signed for units put into operation from June 1 of that year.
Verbund has clinched the first long-term corporate PPA in Romania in a decade
The first large and long-term corporate contract was agreed in February 2022 between Austria-based Verbund, Axpo Energy as an intermediary and an automotive producer they didn’t name. In 2019 they signed a one-year supply contract with Renault-owned Automobile Dacia. Verbund owns the Casimcea wind farm of 226 MW.
In the meantime, Axpo, an energy trading firm headquartered in Switzerland, also arranged a seven-year deal in 2021 for 50% of electricity from the Fântânele-Cogealac-Gradina wind farm. At 600 MW, it is the largest in Europe. The facility belongs to Macquarie Infrastructure and Real Assets.
Romanian green electricity certificates aren’t internationally recognized
It should be noted that TotalEnergies and Dacia revealed a plan in 2022 for an onsite solar park of 30.4 MW in peak capacity in Mioveni in Argeș county and a 3.9 MW unit in Titu in the Dâmbovița area, which would supply one of the carmaker’s other facilities. The French company would build and operate the power plants. The larger one is set to consist of ground-mounted and rooftop segments.
Last year, Ursus Breweries, owned by Asahi Europe and International, and Orange Romania Group both signed virtual PPAs or VPPAs, which means they are buying electricity at the market, but under a financial arrangement with the producers.
The PPA concept is intended for renewables, so it normally includes the delivery of guarantees of origin. They enable the consumer to certify its green energy usage. However, in the case of Romania, the available green tags aren’t internationally recognized as the country is still not a member of the Association of Issuing Bodies.