You don’t have the time, specific knowledge, and financial resources to develop and build your own power plant for the production of electricity from renewable sources, but you wish for a long-term and secure supply with predictable electricity costs in your company? The solution is to find one of the many energy producers from renewable sources and buy electricity directly from them. Many companies in the world get up to 100 percent of their energy needs in this way and are not afraid of rising electricity prices because a fixed purchase price has been established for a multi-year period.
This type of purchase is more and more popular in Croatia and is contracted through the so-called PPA agreements on corporate electricity purchases. RESC recognized this practice as one of the most important ways for renewable energy sources development and became part of the large European RE-Source Platform family dedicated to the development of PPA contracts in the EU.
The RE-Source Platform was founded in Brussels in 2017 and has been coordinating activities to promote a better framework for the corporate use of renewable energy sources at the EU and on the national level. It helps the achievement of the full potential of renewable energy sources in Europe. Every year, the RE-Source Platform organizes an international conference that has become the central meeting place for buyers and producers of electricity from renewable sources. Last year RESC was the national partner of the conference, and Croatia was honored to open the RE-Source Platform 2022 conference in Amsterdam.
RESC has also become the national hub of the RE-Source platform, i.e. a place of knowledge and meeting of stakeholders of renewable energy sources dedicated to the development of PPA contracts. On this occasion, Malgosia Bartosik, coordinator of the RE-Source Platform, said:
The RE-Source Platform is pleased to partner with RES Croatia to establish the RE-Source Hub in Croatia. RE-Source’s goal is a world with net zero carbon emissions. 75% of our emissions are energy-related, so transferring to a fully decarbonized energy system and supporting corporates in their access to clean electricity is at the core of delivering a climate-neutral economy by the year 2050. The global transition to clean power needs to progress much faster than it is now. Even though the problem is global, we must deal with it locally. We are very much looking forward to working together with our Croatian partners to promote and implement new solutions to advance the climate agenda. Effective collaboration between the green energy buyers and sellers, as well as local authorities, will be key to pushing this ambitious goal forward.
The development of PPA contracts is also very important to the European Commission, which believes that they should play a central role in Europe’s strategy for achieving the goals of the green plan in the area of renewable energy sources and climate. Companies in the commercial and industrial sectors make up around half of the world’s electricity consumption. Energy-intensive industries, medium and small businesses, cities, and local authorities are actively researching ways to decarbonize and electrify their own energy consumption. Given that the energy needs of industry in Croatia are huge, it is not surprising that this industry has an interest in buying green energy produced in our country.
Maja Pokrovac, RESC Managing Director stated:
The energy crisis requires innovative approaches to solving the problem of high electricity prices. It is now very clear that only the development of domestic, green, safe energy leads to energy self-sufficiency. PPA contracts enable domestic consumers and producers of renewable energy to connect through a joint venture, through a mutual project of creating a new RES project, and in that way approach banks. State tenders are extremely important, but without the development of PPA, there will be no desired growth of RES. In order for banks to project-finance RES power plants that do not have incentives, they require loans to be secured by at least 60 percent of revenues, with firm PPA contracts. Everyone benefits from this arrangement, including RES producers, consumers, financial institutions, and the state. We are pleased that the umbrella European platform RE-Source recognized the activity of OIEH in encouraging the development of renewable energy sources and we look forward to new, joint successes and new PPA contracts in Croatia and in the region
Although European companies were dedicated to this goal even before the Russian aggression against Ukraine in 2022, due to the energy crisis caused by this war, Europe set new and faster goals for achieving energy security. However, to date, corporate PPA contracts have only been signed in half of the EU member states.
The corporate market for the procurement of energy from renewable sources is rapidly expanding across Europe, and by January 2023, 26 GW of capacity has been contracted, which represents 4% of the total installed solar energy and 6% of the total installed power of wind power plants. Only in 2021 almost 8 GW capacity of renewable energy sources has been contracted. It is an exponentially growing market that can contribute significantly to Europe’s climate goals if regulatory barriers are removed.
Croatian companies that sign PPA contracts join a large global community of corporations planning to switch to green business. According to the latest list of the RE100 initiative, as many as 380 of the world’s largest companies signed a declaration on 100 percent coverage of their energy consumption with electricity from renewable sources.
RESC is organizing the first RE-Source Croatia conference in March dedicated to PPA contracts. For the first time, current and future producers and buyers of green energy will meet in one place. It will be an opportunity to transfer knowledge about the process of direct purchase of electricity from renewable energy producers, legal advice for concluding PPA contracts, exchange of valuable experiences of companies that have already implemented their PPA contracts, as well as an insight into European and world practice that will be presented by representatives of RE-Source platform from Brussels.
