Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established?

Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey of 36 active players in the Power-to-X market, highlighting the critical role of financing. While 50% of respondents expect to reach FID within two years, industry experts deem this timeline unrealistic under current conditions with lacking infrastructure, uncertain regulatory frameworks, and complex value chain management. Potential demand and potential supply for of greener alternatives like green hydrogen, ammonia, and methanol are strong, with both sides eager to transition from conventional fuels. Denmark, with its favorable geography and expertise in renewable energy, is well-positioned for this transition. However, the shift requires a complex transformation of the energy sector, necessitating a robust regulatory framework and transparent business practices to attract investors and unlock Power-to-X’s potential. The business case development is further complicated by the complex nature of the energy market where the fundamentals shift according to the energy transition highly impacting the feasibility of Power-to-X. Investors require solid business plans with “Proof-of-Concept,” long-term agreements such as PPAs, and trusted management to ensure stable operations. Power-to-X’s success hinges on the supply of renewable power, determining the hydrogen’s “greenness”, production profile, and cost of operation.Denmark’s energy mix supports high capture rates especially with PV, as seen with European Energy’s plant in Kassø, though operational hours are a trade-off. Additionally, electrolysers require a substantial water supply, restricting potential plant locations. Fact Box: Water Requirement: A plant producing 1000 Tonnes per Annum (TPA) of hydrogen requires 9 L of ultra-pure water per kg of hydrogen, and 1.5 L of groundwater per 1 L of ultra-pure water, amounting to 13,500 m3 of groundwater annually, equal to the average groundwater consumption in 300 private persons. Conclusion: Water is not an issue  Transport Challenges: Considering a 10 MW Power-to-X plant with a mix of solar and wind ensuring 5000 full-load hours (57%), and a 67% efficient electrolyzer, it would produce approximately 1000 TPA of hydrogen. Transporting this hydrogen in 500 kg tube-trailers would require 2000 trucks annually. Conclusion: Transport is an issue (Hydrogen pipeline etc. is key)   Hydrogen, the smallest molecule, needs significant compression or space for transport. Without a pipeline to Germany, large-scale hydrogen transport from Denmark is infeasible. Without clear plans and timelines to establish the needed infrastructure, the risk of transportation risk is a crucial decisive factor. Electrolyzer technology for large-scale operations is still emerging, indicated by low TLR (Technological Readiness Level), increasing OEM risk. Different technologies have varying operational patterns, influencing their role in ancillary services, a potential revenue stream. The fundamentals of for Power-to-X in Denmark are visible but not well-established. Acknowledging the uncertainties prevalent reveals a sector with high potential and high risk. Technology is nothing without capital and capital is nothing without technology.Ensuring long-term financing entails a need for long-term certainty for investors, significantly enhancing the need for concluding long-term agreements with suppliers and off-takers. Investor Perspective Investors view Power-to-X investments with caution due to inherent uncertainties. Early developments need strong leadership and reputable partners to attract investment and enhance local impact. Leveraging the local economy is crucial; utilizing residual heat from hydrogen production for district heating or fostering new investments can strengthen the business case and reputation.Identifying additional value components that can be exploited enables revenue stacking through ancillary services, district heating, flexible optimization against the spot market and PPA which is fundamental in establishing sound business cases. The “First-mover” advantage is not evident in gaining finance, as investors prefer a proven track record. Current OEM supplies offer a two-year efficiency guarantee, presenting a significant risk for the business case with potential vulnerabilities in long-term agreements. Projects are expected to operate for 10-15+ years, making PPAs crucial for cost mitigation and alignment with EU RFNBO production requirements. HPAs (Hydrogen Purchase Agreements) are needed to ensure stable offtake with foreseeable revenue streams and strong partnerships to build a solid business case. The development of Power-to-X is complex. Project developers need financing to deploy their projects, and financiers need deployed projects to assess risks and attractiveness. Both sides share excitement and vision but are interlocked in their positions. Bridging the Gap Our New Energy seeks to be the missing link between project developers and investors, aligning expectations and realizations to ensure feasible and healthy business case development. ONE can assist in navigating through regulatory framework, identifying components for revenue stacking, applications for public tenders, and feasibility studies.With our extensive knowledge and proven track record in transactions through PPAs, we offer insights and expertise from business case development to transaction completion. Feel free to reach out for more information and support in your Power-to-X ventures. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de June de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de April de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de March de 2024 Cargar más

The energy transition puzzle has not a single solution

The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab, that recently signed a 10 yr PPA for direct RES consumption and hydrogen production in an industrial park Just because oil has been a single answer to the energy problem for so long, it doesn’t mean we must find a single substitute to it. We have to bear this in mind approaching pioneer projects like the Danish industrial park, GreenLab, integrating renewables, green hydrogen, e-fuel production in an industrial park with its own infrastructure. In the view of ONE’s Partner Jakob Bendixen, who helped structuring a recently announced 10-year PPA on 84 MW of wind and solar directly connected to the industries of the site, including an upcoming Power- to-X plant, complexity is of course the nr. 1 feeling. But also, Jakob adds, a strong sense is emerging that work on non-mature technologies like hydrogen and synthetic fuels is now maturing much further than it appeared possible just few years ago. “Of course costs are still an issue but when it comes to decarbonization, you don’t have to compare green hydrogen to grey hydrogen but to other green fuels, like biodiesel. If you have decided to go green, don’t compare green to black, but instead compare the different green solutions. If you manage to keep the total energy costs low, by using PPAs, direct lines, adding revenues from ancillary services, recovering waste products, etc., like in this case, then the total “cost of green” is actually quite reasonable”, he says. “There must be no single solution for the oil problem, it’s better to have many to avoid dependencies”. GreenLab is a green and circular industrial park in northern Jutland, with an ambition to host industries that produce both energy products like sustainable liquid and gaseous fuels, but also non-energy products like construction boards and marine proteins. They also work with utilising energy in all its forms – by making one industry’s waste another industry’s resource. The corporate power purchase agreement just signed with Eurowind Energy is the first of its kind in Denmark, involving 54 MW of wind and 30,8 MW of solar feeding directly into GreenLab’s internal energy infrastructure. The RES capacity will power businesses inside the industrial park, including the 6MW Power-to-X production, which is already being tested inside the park. GreenLab is designated as an official regulatory energy test zone in Denmark. This enables the green companies within the industrial park to share each other’s surplus energy, which so far have encountered barriers under the current electricity regulations. By balancing energy production with industrial consumption, new industrial parks, like GreenLab, can be established without negatively affecting the existing collective energy network. This contributes to reduced grid fees, and thereby lower energy costs, which is especially critical for technologies like green hydrogen. Ideally, GreenLab’s test zone will be a proof of concept which can be replicated to other industry parks globally. The cost of making hydrogen depends for 2/3 on the cost of electricity and for 1/3 on everything else. With reduced grid fees, a reduction of up to 40% on the cost of power can be achieved, cutting down the overall costs dramatically. There obviously is still a large difference between building a complex business case for PtX integrated with PV and wind, and for the simple stand-alone RES generation project. “With ready to build PV or wind projects, the risk for the developer is low. But with integrated PtX projects you cannot have all the numbers in advance and some faith is needed that the whole thing will work. But we are learning at every step and I feel we moved a lot further than we were only a few years ago. Going forward we expect to see capture rates increase on stand-alone RES projects, and therefore more companies will be interested in projects with some level of integrated PtX solutions”, Jakob concludes. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de June de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de April de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de March de 2024 Cargar más

The Silverlining: BESS and the Future of Renewables in Spain

PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables in Spain In the ever-evolving landscape of Spain’s energy market, a recent development has caught the eye of industry experts and stakeholders alike. The captured prices for photovoltaic energy have experienced a significant downturn, a scenario attributed to an abundance of sunlight and unusually mild temperatures across the Iberian Peninsula. This trend aligns with our projections at Our New Energy, yet it raises pertinent questions about the future of the renewable sector, as astutely noted by Rubén Esteller (link). This downturn in prices arrives at a particularly precarious moment. Spain is at a crossroads, with over 40GW of renewable projects in limbo, awaiting final authorizations amidst bureaucratic delays (link). These projects, unable to secure final permits can/should not sign PPAs and find themselves on the brink of economic and executional collapse. Low electricity prices seem beneficial for taxpayers; the paradox: Excessively low prices deter investment in the energy transition and decarbonization efforts, posing a significant challenge to a sustainable energy transition. Amidst this backdrop of challenges, a hidden opportunity emerges for Battery Energy Storage Systems (BESS). Spain and Portugal, trailing behind their European counterparts in BESS regulation, now have a chance to leap forward. Countries like Germany, Netherlands, Poland or Italy have already implemented mechanisms to encourage investment in energy storage, recognizing its critical role in managing the intermittency of renewable resources. Current price scenario, with low prices projected to remain low, prompts a crucial question: How will the renewable industry adapt? The answer lies in support mechanisms, specifically, the introduction of auctions or capacity markets (link) (old story: taxpayers pay). This market is poised to offer a lifeline to technologies under strain also for BESS. BESS stands to benefit from the current market dynamics, capitalizing on the opportunity to store energy during low-price periods and release it when prices peak. This arbitrage revenue could redefine the investment landscape for storage in Spain, turning a significant solar challenge into a catalyst for batteries. As we navigate these turbulent waters, the reactions of the renewable industry, the trajectory of power prices, and the actions of policymakers will shape the future of Spain’s energy market. The unfolding scenario presents a compelling narrative of resilience, innovation, and the relentless pursuit of sustainability. What do you think? How will renewable industry respond? What trends will we see in power prices? And how will policymakers adapt to these new dynamics? Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de June de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de April de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de March de 2024 Cargar más

PPAs: why Italy only witnessed a few corporate cases

PPAs: why Italy only witnessed a few corporate cases Get in touch PPAs: why Italy only witnessed a few corporate cases Gallanti (One): generators and off takers don´t share the same priorities, banks are cautious and there are accounting complexities. Yet the potential is about to break free According to Dario Gallanti, Partner of the energy transaction firm Our New Energy, specializing in power purchase agreements (PPAs), there are different reasons why only a few long-term corporate PPAs are signed in Italy for renewable energy, despite the potential of the market. The main reason is the drop in energy prices which has cooled industries’ appetite for renewables and the divergence of approach among customers, seeking low-priced electricity, and investors, that instead need “tailor-made” deals. Moreover, the caution from banks, who tend to prefer the “mediation” of traders and utilities, and the unfamiliarity of the industry with the applicable accounting treatment. “Given the potential,” Gallanti tells Staffetta, “one would think that many corporate PPAs have already been signed in Italy, but this is not yet the case”. The primary cause is the high transaction risk, “with agreements falling through shortly before signing, despite the efforts invested in the transaction by both parties.” Gallanti also points out that falling market prices are playing a significant role: “forward prices have dropped substantially, and we now witness around €150/MWh for Italian Cal-2024. That’s still almost three times higher than the pre-pandemic spot market level, but somehow corporates simply seem less interested in securing long term fixed energy prices, believing that the storm is behind them and the need for PPAs is no longer so pressing”. A key issue, Gallanti explains, “is that the asset owners and the energy-buying companies often don’t have the same view on PPAs: companies often approach long-term agreements as a simple commodity contract, with price as the main evaluation factor, while most sellers view PPAs as more complex commitments. As a result, Italian generators allocate less time and spend fewer resources to initiate dialogue with off takers, as they know that the opportunities for negotiating a tailored contract are limited”. Additionally, there’s the issue of bankability: “financing bodies have been very reluctant to finance corporate PPAs unless the off takers have an investment-grade credit rating. The banks prefer trading companies or large utilities as off takers, who can manage the production risk profile of the renewables asset and then resell the energy to consumer companies with baseload profiles.” Last but not least, Gallanti concludes, “financial PPAs in Italy are considered less attractive than physical PPAs in terms of VAT treatment. Besides, several companies (and their accountants) are less familiar with the accounting of these financial derivatives”. The result is that so far, despite numerous announcements and press releases – sometimes concerning mere letters of intent or agreements on certificates (GOO) – the Italian PPA market for newly constructed assets has only secured a cumulative contracted volume of 1.4 GW from 2019 until now. But things appear to be changing. “With a significant anticipated increase in market volumes, thanks to the growth in solar authorizations granted in the last six months, there will be only a limited number of ‘good priced PPAs’ available for the generator. In such a ‘buyer’s market’ context, we are confident that more Italian corporates will be able to unfold their full potential, sourcing energy through direct corporate PPAs with asset owners”. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de June de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de April de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de March de 2024 Cargar más

A good PPA or just a PPA?

A good PPA or just a PPA? Get in touch A good PPA or just a PPA? Market parity in Italy: why overlooking complexity means missing out on potential value As leading advisors on structuring, negotiating and closing long term power purchase agreements (PPA), Our New Energy (ONE) deal with many different PPA types and offtakers in the expanding Italian PPA market, Partner of ONE, Dario Gallanti, said on July 13th in Rome, sharing with the audience of Solarplaza Italy his views on what makes up an attractive contract. Italy’s PPA market features approximately 1.2 GW of actual long-term transactions executed to date, with most of the corporate agreements in the country still closed with utilities as sellers. “As the market expands, driven by decarbonization targets and more projects and permits becoming available, more investors without power market or even renewables experience are facing counterparties who have concluded many PPAs in Italy and abroad – Dario pointed out – sometimes overlooking the increasing complexity of the market, missing out on potential value during negotiations and oversimplifying terms and conditions or, even worse, completely overlooking these. On the other hand, off takers, having concluded deals and on the back of their knowledge of the energy markets and transactions, are well positioned to extract all potential value drivers”. The Italian PPA market is evolving very rapidly, and seemingly moving away from standardization which we saw, for example, with the simpler balancing and route to market agreements. This results in a big disparity in attractiveness among seemingly identical PPAs: a good agreement differs substantially from just “an” agreement. The current environment raises ever-new complexities and challenges, Dario emphasized: from an extreme seller’s market driven by a lack of authorized projects and a spike in energy prices, the market is quickly shifting to a more buyer friendly market, with bearish prices in which PPA market dynamics, being the balance of PPA demand and offer, are gaining importance over forward energy market dynamics. In this context, the value of additionality for Corporates is becoming an even more important value driver and is expected to shift their interest towards Pay-as-Produced profiles. Moreover, merchant exposure, from being an opportunity in 2021-22, has now shifted back to be a risk factor that requires a management strategy, something that ONE team has been increasingly involved with through Dynamic Asset Management products. Last but not least, the decline in PPA prices, coupled with divergent long-term price perspectives among market players, has sparked interest in more sophisticated price structures like cap and floor contracts, where corporates have shown greater openness compared to utilities. “Now more than ever it is clear in the Italian market how, in order to achieve the ambitious goals of newly installed wind and solar power by 2030 – Dario concludes – one of the bottlenecks will be represented by a lack of human resources. While this has already been acknowledged in parts of the value chain such as EPC, it is rapidly expanding to include off-takers themselves and the various advisors involved in PPA and M&A transactions. Staying close to the market and being able to differentiate a deal from competitors by risk allocation, size, technology, or profile to make it more appealing to off takers will become increasingly essential to secure the best conditions. Only investors embracing these changes will unlock the full market parity potential”. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de junio de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de abril de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de marzo de 2024 Cargar más

Our New Energy Expands in Central Europe with New Office in Germany

Our New Energy Expands in Central Europe with New Office in Germany Get in touch We are thrilled to announce that Our New Energy is expanding its presence with the opening of a new office in Germany. This strategic move marks an exciting milestone for our company and reaffirms our commitment to providing exceptional services to our clients in the region. The office will be primarily focused on serving our German, Dutch, and Central European activities (Austria, Switzerland, and Hungary). Leading the German office is Imre Vass, newly appointed partner at Our New Energy.  Imra Vass has more than 16 years of energy market experience, including as Lead Originator at a major European utility. He has worked on and closed PPAs in several key European PPA markets, and was one of the first people to work on market-term PPAs. “Our offering in these markets spans across PPA transaction and strategic advisory, hedge advisory,  P2X commercialization, and further energy market-related topics around sustainability and net zero.”  –  Imre Vass, Partner at Our New Energy and head of our German office By establishing a new presence in Central Europe, we aim to foster closer collaborations with our German clients, better understand their needs, and deliver tailored solutions that meet their specific requirements. We see a unique opportunity to help current and future clients expand in a market that is ripe for renewable energy projects. The new office, located in Munich, will serve as a hub for our operations, enabling us to offer localized support, enhance customer service, and build stronger relationships with our German and Central European partners. With a talented team of professionals, well-versed in the nuances of both the German market, as well as the Spanish, Hungarian, Austrian, Netherland, and Italian markets,  we are excited to start this new chapter. We look forward to serving our German and Central European customers, forging lasting partnerships, and helping promote renewable energy solutions. Stay tuned for updates and news about our new office as we embark on this exciting journey in Germany. For more information, please contact our team.  We will also be attending E-world in Essen, Germany, 23-25 May, 2023 – feel free to reach out. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de junio de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de abril de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de marzo de 2024 Cargar más

Endesa signs game-changing PPA

Endesa signs game-changing PPA Get in touch The renewable energy sector is rapidly growing, with, luckily, no end in sight. Companies across various industries have been exploring opportunities to switch to renewable energy sources as a way to lower their carbon footprint and support the transition to cleaner energy. And in that transition, we are seeing some interesting first-ever events:  Our New Energy recently assisted our client, Sonnedix, in signing a 77MW Power Purchase Agreement (PPA) with Endesa, Spain’s largest utility company. The PPA includes five solar plants located in Valladolid, Castilla y León province of Spain, and is estimated to generate 156GWh of renewable energy annually. The projects are currently under construction and are expected to begin operations in the first quarter of 2023. Once operational, the solar plants will produce enough electricity to power over 50,000 homes, reducing more than 30,000 tons of CO2 emissions.  This deal is significant because it marks the first time that Endesa has announced a PPA with a renewable energy asset. The agreement is also an excellent example of how utilities can significantly influence energy transition because they have a unique position in the energy sector, with their intermediate position between electricity producers and consumers. This position puts utilities in a unique position to meet the needs of renewable energy investors as well as end users. “We are very excited to partner with a company like Endesa, who shares our commitment and drive to keep powering a bright future for all” said Axel Thiemann, CEO de Sonnedix states in a press release.   “We started off our journey in this country, over a decade ago, with a 0.9MW project. Today, our largest office is in Madrid, and our largest portfolio of operational projects is here in Spain, with over 175 projects and a total installed capacity of more than 785MW. Partnering with Endesa, one of the largest electric companies in Spain becomes a true testament to our sustainable growth trajectory, but also to our commitment to being a key player in the Spanish energy transition”. The transition to renewable energy sources is highly necessary and urgent. With more renewable energy projects being developed, power purchase agreements like this one between Sonnedix and Endesa will continue to play a crucial role in financing and supporting these projects.  Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de junio de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de abril de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de marzo de 2024 Cargar más

Lessons from the industry – announcing private wire PPA Mytilineos RSD and Saint-Gobain Glass that should serve as an example for future legislation

Lessons from the industry – announcing private wire PPA Mytilineos RSD and Saint-Gobain Glass that should serve as an example for future legislation Get in touch 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. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de junio de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de abril de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de marzo de 2024 Cargar más

It always seems impossible until it is done – A PPA case of great importance.

It always seems impossible until it is done – A PPA case of great importance. Get in touch Everyone laughed at the idea of a flying machine until the Wright brothers took flight in 1903. While we are definitely not the Wright brothers, we recognize that changing our current energy systems requires being willing to do things for the first time. Innovation is not constricted to Silicon Valley but includes changing the way we use market mechanisms and make investments. In Our New Energy, we dare to do things differently. Holding excellent service at the core of our work, we always look for new ways to evolve the PPA market and serve our clients. Today, almost six years after the birth of Our New Energy, we are happy to announce another ’first’ in market-parity transactions: The first 10-year PPA in Cyprus, as a deal between our partner, Svea Solar, and the local utility, Evergy.  This PPA covers the delivery of energy from a solar asset producing around 5 GWh/year of green electricity over ten years, displacing more than 1.500 tonnes of CO2. In comparison, Cyprus currently has 335 MW of PV capacity installed. Where many other European countries have invested heavily in renewables, Cyprus is currently generating only 16% of its electricity via renewables while covering its electricity needs via oil and gas. This reliance on oil and gas imports is felt by electricity consumers on the island and has sparked interest in greener energy investments. The country is aiming for a 26% share of renewables in gross final electricity consumption by 2030, but hopefully, this is a low bid. The case is one of particular interest, as it proves the viability of renewable energy, even in the toughest of markets. Partner at Our New Energy, Dario Gallanti, notes: “Making PPAs a viable and scalable solution on a truly energetic island such as Cyprus, with an energy mix based on oil, and doing so without a properly liberalized market, makes this one of the most groundbreaking agreements in Europe.” Innovation doesn’t happen in a lack of obstacles. It happens in friction, in headwinds. That is how we make the impossible possible.  “Through this transaction, we have closed a very important milestone for the strategic investment plan we have in Cyprus. While the reform of the Cypriot electricity market towards the EU target model is only expected during H1-2023, this agreement will allow us to start the production of our assets already in the coming weeks and navigate the regulatory uncertainty of a fast-evolving market”. – Pontus Skog, Head of Utility Project Development at Svea Solar.   With Southern Europe being a core geography for ONE’s energy transaction activities, we are looking forward to continuing our support of companies that push the boundaries of innovation in the energy transition. Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Get in touch Last week (04/06), PwC published a survey… Learn More 10 de junio de 2024 The energy transition puzzle has not a single solution The energy transition puzzle has not a single solution Get in touch ONE’s Partner Jakob Bendixen on the Danish GreenLab,… Learn More 1 de abril de 2024 The Silverlining: BESS and the Future of Renewables in Spain PPAs: why Italy only witnessed a few corporate cases Get in touch The Silverlining: BESS and the Future of Renewables… Learn More 14 de marzo de 2024 Cargar más

The EU electricity intervention package – What can we expect?

The EU electricity intervention package – What can we expect? Get in touch Responding to recent news about the comprehensive market intervention package currently being discussed in the European Union, Miguel Marroquín from Our New Energy has the following comments:   ”Overall, I think all this turmoil and considerations around the market design is coming quite late; these issues have been apparent for a long time, including at times when market prices did not support the investment into renewables. It is now obvious that the current marginalistic fuel-cost, merit-based mechanisms designed decades ago do not help the average consumer. “Market design does not work anymore” tells us something about the desired purpose of the market from the speaker’s perspective. Further, its proposed ‘solution’ tells us something about the understanding of how the market truly works and what needs to be fixed. Across Europe, renewables have been seen as the solution to the energy trilemma (the quest for sustainable, reliable, and competitive energy), yet these have always only been half-measures: We offered considerable incentives to deploy RES, which at times have been overly generous, at the expense of taxpayer’s energy bill. This was instrumental in creating the demand and the space for technology costs to reach market parity. However, we have been failing to empower and greet market-parity renewables, and there were never real incentives for the industries and consumers to ‘electrify’ their consumption. Hence, we still have a dependence on third-party fossil fuels. With the dawn of market-parity over the course of the past 5 years, there have been numerous discussions in the industry concerning ‘captured’ prices, curtailment, the introduction of negative pricing, ancillary services, PPAs, saturation in agencies delaying the development of RES, and many other problems related to these. Back then, these were not a priority for EU and national officials. Last summer, when electricity prices were in the 70-100€/MWh, I saw a journalist on TV saying such prices were the ‘toll to transit to a renewable-based system’… Recently, a close friend reports being in a room with an EU Energy Minister and his counsel and overhearing the sentence: “PPAs are neither regulated nor feasible here.” With this understanding and spirit, it’s no surprise to read about discussions on market intervention of unprecedented proportions that are still leaving a number of important unknowns and considerations open. These include: The new intervention package is proposed to introduce a price cap only on infra-marginal technologies (which is less a change in market design and more a discriminatory intervention into a portion of the market). Now, will consumers still pay the marginal price? Or the weighted average offering price? How exactly will the savings from introducing this cap result in a reduction of the energy bill for consumers? Because if not through the market-based portion of the energy bill, it might simply result in a pot of money redistributed arbitrarily, and that is not a great start for a transparent, democratic, and meritocratic process.   Nobody will disagree that any newly introduced policy should never undermine the access to energy and the plans to decarbonize Europe. I wonder what message it sends to investors in energy transition to see their plans persistently brought to question by ideas such as these?Last year, Spain’s Royal Decree-Law 17/2021 on natural gas prices (RDL 17/2021) required immediate revisions. It risked rendering thousands of mega-watts bankrupt because it overlooked how the mechanics of this decree-law interact with ‘private’ PPAs. If revisions had not been made, the country would have missed this tool to render investments in renewables bankable. As for the ‘effect’ of Spain enjoying a lower electricity price than its neighboring European markets, for those reading from abroad, this is thanks to another synthetic concept: The cap on gas price ­– but only for electricity generation. We let households and industries pay the full market price for gas but then compensate ‘behind the market’ for the difference between the real and caped gas price. That is how the ‘visible’ value of electricity market price is reduced, thereby limiting revenues for inframarginal technologies. An act worth of David Copperfield. Are we about the repeat that act?   Lastly, EU officials are weighing the creation of a ‘new bank’ to foster investment in hydrogen generation. I speak daily with investors in energy transition, and have yet to hear there is a shortage in capital. So how is a new bank solving a problem? And since hydrogen is produced through electrolysis which requires electricity, it only makes sense if that electricity is NOT produced with fossil fuels. Therefore, transiting to a hydrogen-based economy requires investing in renewables – like A LOT of renewable! Should policies not focus on making that transition possible? Or are we determined to re-regulate the market and waste the efforts of the past decades to liberalize it?   Overall, this new electricity market reform seems reactive, and we fear it won’t aid the consumers nor the green energy transition. Worst case, it will require officials to deploy an abundant patchwork in due time, cause damages to the industry, and ultimately require to tap from their endless source of capital: taxpayers.”   Recent Post Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? Financing Opportunities for Power-to-X in Denmark: Are the Fundamentals Established? 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