EF Solare Italia is committed to bring forward the industry’s instances, to help the growth of solar power and support Italy on its path toward a sustainable energy future.
PPA AND RENEWABLES: A JOINTH PATH OF GROWTH AND DEVELOPMENT
PPA, or Power Purchase Agreements, are long-term contracts for the purchase of electricity concluded between a buyer (off-taker) and a producer, with a multi-year duration (preferably at least ten) and with a contract-defined pricing formula that regulates the whole duration of it. In the renewable industry, long-term PPA are establishing themselves as a growth tool on the energy market alternative to incentives and public subsidies and to the auction mechanism. Their development is helped by the continuous drop in technological costs, which is pushing green sources toward market parity. The push to the growth of if the industry that PPA can provide will thus help to reach more easily the national and European renewable generation targets, that the National Energy and Climate Plan 2030 set for Italy at 30%, and in turn contributing to decarbonisation.
In January, to explore the subject the “PPA Committee – The Italian Way to Renewable PPA” initiative was launched by REF-E and Public Affairs Advisors with help from Herbert Smith Freehills. The PPA Committee was participated by 55 companies active in all the segments of the energy industry, including EF Solare Italia. The works, with the neutral intermediation and the scientific support of the organizers, has unfolded in 5 general meetings, 7 themed workshops and a Q&A compiled by the research partners.
The project has allowed to share the participants’ experiences, comparing risks and opportunities offered by this kind of contracts, and mapping obstacles still present on the national market, producing proposals and suggestions for their overcoming. The results have been proposed as a study, presented on 18th July: in broad terms, a widespread interest and consensus has emerged from the various operators of the industry toward this form of contract, along with the belief that there’s room for a further spread, preparatory for a growth of renewables.
EF Solare Italia too, as the leading photovoltaic operator in Italy, offered its point of view with two suggestions aimed at overcoming the current difficulties in the stipulation of PPA: first of all, simplifying the authorization process for new renewable plants. There has to be a tighter coordination between the State and Regions and a bigger empowerment of the latter in feeling as an actor in the process of reaching the national goals. To rationalize the passages of the authorization process it will be necessary to identify the responsibilities of the different parts involved and define a reliable timing for approval. The objective on this front is to have certain rules and timing.
The second suggestion is to support more the development of storage and a new market design. The push for the installation of more renewable capacity will produce price signals on a long-term, which will discourage further investments in the industry – the so-called cannibalization. A solution to that could be the spread of storage systems, that tend to lower prices curves and thus contain the problem of over-generation during midday hours, and the reform of market design, investigating the issue of marginalization in energy prices and rushing the opening of the dispatching market to the non-plannable renewables.
EF Solare Italia, that today has the biggest Italian photovoltaic portfolio with over 300 plants and an installed capacity over 800 MW, is committed to bring forward the industry’s instances, to help the growth of solar power and support Italy on its path toward a sustainable energy future.