Repsol has agreed to supply renewable electricity to Microsoft through six long-term virtual power purchase agreements (VPPAs).

The 12 year agreements are associated with three wind farms and three solar plants in Spain expected to be operational by December 2025, which have a combined installed capacity of 230MW,

The deals build upon the partnership initiated in 2021, bringing the total installed capacity to 320MW.

Both companies have expressed their commitment to reducing carbon emissions, with Repsol aiming for zero net emissions by 2050 and planning to expand its renewable power business to achieve an installed capacity of between 9GW and 10GW by 2027. Microsoft has set a goal to source all of its energy needs from renewable sources by 2025.

The collaboration between Repsol and Microsoft extends beyond energy supply. It encompasses a strategic partnership to expedite Repsol’s digital transformation and contribute to the global energy transition. Together, they are developing AI-powered digital solutions. Repsol is also increasing its use of Microsoft’s cloud solutions, including a recommitment to the Azure cloud platform, to enhance its operational efficiency.

Repsol executive managing director of low carbon generation João Costeira stated, “This agreement with Microsoft, a strategic partner, highlights the importance of renewable energy for the digital revolution in which we are deeply involved, and it also demonstrates Repsol’s commitment to decarbonisation.”

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To support its growth objectives, Repsol plans to invest between €3bn ($3.3bn) and €4bn net in developing its project portfolio by 2027.

The company’s expansion strategy includes a significant presence in the Iberian Peninsula, accounting for 50% of the total installed capacity, and 30% in the US, following the integration of Hecate and ConnectGen’s pipelines.

Repsol is also looking to grow its operations in Chile and Italy, targeting a combined installed capacity of 1.5GW by 2027.

In April 2024, it completed the Frye Solar project, its largest such plant so far in the US.