Swedish power company Vattenfall has signed a ten-year corporate power purchase agreement (CPPA) with the Deutsche Telekom subsidiary Power & Air Solutions.
Under the agreement, Vattenfall will supply renewable electricity from a solar park in Mecklenburg-Western Pomerania, Germany, which is expected to be completed by mid-next year.
Once completed, the solar facility will have an installed capacity of 60MW.
Vattenfall sales and origination director Christine Lauber said: “We are very pleased that with this agreement, we are further accelerating the growing market for long-term electricity supply contracts for industrial customers in Germany.
“Vattenfall’s goal is to enable fossil-free living within one generation. That also means supporting our customers in achieving their sustainability goals.”
According to Lauber, further expansion of renewable energies in Germany will not be supported by the EEG subsidy scheme to the same extent in the future. Instead, it will mainly be based on PPA contracts.
Due to the former EEG subsidy scheme, German companies did not introduce CPPA in the business, which was the case in other European countries.
Lauber added: “Investors can use the PPA instrument to partially hedge their risks for new wind and solar parks, and customers have direct, long-term access to green electricity. In this way, they can contribute directly to the expansion of renewable energies.”
Earlier this month, Vattenfall signed a CPPA with AG Barr, a soft drink and consumer goods company that serves various brands such as IRN-BRU and Rubicon.
The CPPA requires Vattenfall to supply 100% renewable electricity to all AG Barr’s sites in the UK for a ten-year period.