Tion Renewables (was Pacifico Renewables Yield) has signed a virtual power purchase agreement (PPA) with glass producer Saint-Gobain, for its 52MW Polish wind portfolio.
Under the PPA, 100% of the electricity produced by Tion’s Polish wind parks will be sold on the market and virtually settled with Saint-Gobain.
The 15-year-agreement will commence in January 2025 and assures a fixed price for each megawatt-hour from that point onwards, including annual step-ups of 2.5% consistent with the Polish Central Bank’s long-term inflation target.
The expected electricity production from the 51.8MW portfolio amounts to approximately 191 gigawatt-hours a year, making it one of the largest PPAs of this kind ever signed in Poland, Tion said.
The agreement locks in upside from elevated electricity prices and replaces the CPI-indexed state-guaranteed Contract-for-Difference.
Thus, it reduces the company’s power price risk exposure and significantly increases the amount of contracted revenues, thereby providing additional debt capacity for the group’s portfolio.
Christoph Strasser, Co-CEO of Tion Renewables, said: “We believe that PPAs with energy-intensive corporates will become more and more important in accelerating the energy transition, particularly during turbulent times like now.
“We are very proud that we were able to demonstrate our ability to execute such an agreement with a highly reputable partner like Saint-Gobain.
“Also, we are very happy to crystallise significant value accretion for our largest project less than ten months after our final investment.”
Mathieu Ville, Head of PPA Transactions at Pexapark, added: “We are pleased to have supported Tion on this PPA transaction. In Pexapark’s experience of the Polish market, the PPA structure, price and other commercial terms form a compelling offtake solution, especially during this turbulent time.
“We want to underline the focus and competence of the Tion team which, combined with the strong green procurement will of Saint-Gobain, made for an efficient transaction.”
Deloitte Advisory and Pexapark acted as advisors to the group and Dentons acted as legal counsel to the group.