Lessons from the industry – announcing private wire PPA Mytilineos RSD and Saint-Gobain Glass that should serve as an example for future legislation
Our long-term partner Mytilineos RSD recently closed a 10-year private wire 4.9MW PPA with Saint-Gobain, the world’s largest glass manufacturer.
We want to illuminate some of the features that make this PPA unique and make it an uplifting story for the renewable energy sector.
The deal is significant for a number of reasons. Firstly, its speed. The solar asset will already be up and running this year on the premises of Saint Gobain’s historical factory in Vidalengo, near Bergamo.
Because it is ground-mounted, not rooftop-mounted, it allows for a larger asset size, meaning a larger output and lower costs, resulting in an even more competitive price for Saint Gobain.
In this PPA, Saint Gobain commits to purchasing the energy from the asset in private wire for a period of at least 10 years.
The deal serves several purposes; sustainability, energy security, and competitiveness:
Saint-Gobain is committed to offering sustainable products and solutions for customers, and part of that commitment is sourcing electricity from renewable sources. With this PPA, Saint Gobain is reaching an impressive level of additionality. Not only because their commitment will ensure that new assets will be built, but they are also providing the land for the asset. By having the solar assets be located on the premises of the existing Saint Gobain factory, no new land needs to be developed, preserving the natural resources.
Furthermore, the company is securing access to sufficient electricity in these uncertain times. For many production companies, planning for the future is no longer just related to business management but also securing the resources needed to operate.
This 10-year PPA secures a significant portion of Saint Gobain’s electricity needs in Vidalengo. In addition, locking into a favorable electricity price ensures business competitiveness, as it reduces operational costs in part due to significant savings on grid fees.
Yiannis Kalafatas, Chief Executive Director of MYTILINEOS’ Energy Sector, notes:
“**MYTILINEOS is evolving into an integrated utility, but as it is at the same time one of the largest power-intensive industries in Europe, understands the increased needs of its partners. Italy represents a strategic country for the Company and with this agreement we are demonstrating our capabilities to support local industries in this difficult period of energy volatility and our support to the Italian energy independence policy.”
Because the assets are located in Italy, they fall under the Italian regulation for self-consumption, known as SEU.
“The SEU is some of the most advanced legislation for self-consumption in Europe, as it allows a third party to build assets on the consumer’s property and sell the energy. Any excess production can be sold to the grid, and the regulation provides for mitigants to manage counterparty risks. We believe that this particular setup could benefit many other European nations, where legislation prevents having different ownership for the production asset and consumption facilities”.
– Dario Gallanti, Partner at Our New Energy
Ultimately, this PPA shows us that with sound regulations that support the renewable transition, companies can gain competitive advantages while securing their energy needs and honoring their Sustainable Development Goals commitments.
We should all take notes from this case, where policy, business growth, and sustainable development go hand in hand, and use it as inspiration for future business practices.
MYTILINEOS was advised by Gattai, Minoli, Partners and Our New Energy on the transaction.