Ivona Zagajski
from the Marohnić, Tomek i Gjojić Law Firm
pointed out the differences between physical and virtual PPA contracts and the risks that should be taken into account, but also said that it should be kept in mind that each individual contract is tailored to the energy buyer and seller. It is important to weigh the risks and benefits, but the long-term benefits of such purchases mean a lot to the market.
Željka Blatančić
from Zagrebačka banka
said that they are witnessing an increasing number of requests for financing RES projects through PPA contracts, especially in the past year, and that banks are working rapidly to adapt to this change in the market. I pointed out that every bank much prefers a long-term contract and that with a good credit rating of the customer and a solid contract, the financing of RES projects is not in doubt.
Mislav Slade Šilović from PwC Croatia said that a few years ago it was extremely difficult to talk about PPA contracts and explain their benefits, but according to the very large number of interested participants in this conference, it is clear that the time has come for a faster and better development of PPA of the contract. Everyone’s interest in secure supply and long-term purchase of energy at fixed prices confirms the topicality of this topic.
Tomislav Ćurković, director of ENCRO, shared his experience of signing a virtual PPA contract for a wind power plant that will soon be built and emphasized that cPPA and PPA should be, as the European Commission requests, one of the main incentives for RES development. He said that his company has another 1,000 MW under development, but that the development of these projects depends on the adoption of the necessary by-laws. ENCRO, like other OIEH members, he said, has a large number of projects that can stimulate market development as well as offer green energy. In his opinion, further development will depend on state incentives, and the new electricity market model requires just such state engagement.
Perhaps one of the most important topics of the RE-Source Croatia conference held on March 17. in Zagreb’s Sheraton hotel, it was how to enable the use of green, renewable energy at long-term fixed prices by citizens as well as small and medium-sized enterprises. Because this is ultimately the goal of the European Union, which, due to the energy crisis caused by the war in Ukraine, designed the REPowerEU plan, the implementation of which aims to move away from fossil fuels and enable greater use of renewable energy. Corporations and companies that, before the crisis, signed PPA contracts for the purchase of green energy directly from producers at fixed prices for a multi-year period, happily and contentedly weathered the worst days of the crisis, while others exposed to raging market prices shut down or had to reduce production.
Therefore, the recently proposed reform of the market that determines electricity prices went a step further and made it possible for the proposed model to provide PPA contracts to small and medium-sized enterprises, which are the backbone of the economy, and then, of course, to citizens.
This was the topic of the introductory lecture by Naomi Chevillard, from SolarPower Europe, which focused on models for achieving this goal. The energy communities will have a big role in the development of the PPA contract and she cited the example of a sports club in Portugal which, with the help of a rooftop solar power plant, supplies the club with energy but also shares electricity with families and companies within a radius of 4 kilometers. But for these jobs, they hired a third party, a company that performs the administrative, technical and organizational part of the project for them.
Referring to the presentation, the participant of the second panel, Zoran Kordić, the manager of the energy cooperative ZEZ, said that the cooperative model of ZEZ is very close to the European vision of the implementation of PPA contracts by energy communities, but that it is necessary to remove numerous administrative difficulties that the organization of enthusiasts and activists face it cannot handle, for example, a large company that has both the resources and the time needed to create a PPA contract.
The role of the state is crucial here, Naomi Chevillard concluded, noting that the European Commission also envisages the establishment of special state funds that would serve as guarantees for the creation of such contracts, and emphasized the importance of reducing administration.
The team and Marin Bekavac, head of processes and energy, CEMEX Croatia, a company that globally wants to drastically reduce its carbon footprint and enable 100% use of green energy in its Croatian branches, agreed. Until now, they have not been able to sign a PPA contract in Croatia. There are many reasons why, but one of them is the large amount of energy they need per year. But he also said that in Spain the state fund guarantees the financial support of PPA contracts signed by the energy-intensive industry, and that in Spain the Cemex company has dozens of signed PPAs. There is no need to invent new models, you just need to copy the successful local model and thus Croatia can develop the desired volumes of PPA contracts.
Vladimir Sabo, director of retail solutions for customers, director of E.ON companies
Energija and E.ON Plin said that EON, as a supplier of electricity, is ready to be a partner in the green transition to its customers and offer new cooperation models for the availability of this energy, and through the creation of PPA contracts, but it should also be emphasized how important it is to accept these new business models to the distribution and transmission network.
Laurenz Vuchetich, a partner in the Batarelo Dvojković Vuchetich Law Firm, confirmed how challenging PPA contracts are and highlighted the basic differences between these and the contracts signed with HROTE, which have a high level of security. PPA contracts, on the other hand, carry much more risk, and the legal protection of buyers and suppliers will be something that the European Commission will work on in the coming period so that these contracts also provide equality and financial security for everyone.
The first Croatian virtual power plant KOER plays an important role in the availability of green energy, confirmed Marko Lasić, its director. The first aggregator in Croatia offers additional services in cooperation with the transmission system operator for reducing consumption and increasing consumption, as well as reducing production and increasing consumption. This is a specific service they offer to industrial plants. They are currently in the phase of expanding the model of PPA contracts that were previously available to corporations, and are now being made available to companies that are large consumers of electricity. They see their role in eliminating barriers when concluding these complex contracts.
At the panel on international energy purchases, large corporations such as the Greek Mytilineos showed how, thanks to the purchase of green energy through corporate PPA contracts, they enabled the safe continuation of their energy-intensive metal industry. The company went one step further and became a producer of renewable energy and is developing more than 400 MW of projects in Croatia, said Vincenzo Quinci, Head of Origination Europe for Renewables, MYTILINEOS S.A. He confirmed that they buy green energy within the country and that the possibilities of virtual PPA contracts are excellent and they sign such contracts more often. Vincenzo Quinchi was a participant in the third panel, which discussed the purchase of green energy through virtual PPA contracts outside the country’s borders and the security of such purchases and the great complexity of such contracts.
Dorota Debinska-Pokorska, a partner in PwC Poland, concluded in the introductory lecture, as well as on the panel, that she personally is not an advocate of such a purchase precisely because of the numerous risks. The creation of PPA contracts within the country is complex, and cross-border ones are additionally demanding precisely because of the different legal provisions of the country of the buyer and producer of green energy, which are located in different countries. Precisely because of different legislation and belonging to different energy markets, such contracts carry additional risk. It is always better to buy energy in the country, she concluded, but if it is not possible otherwise, buy it across the border, just check everything carefully, she says.
Branimir Beljan, Regional Relationship Manager, from Danska Commodities, agreed with this and concluded that it is wiser to buy energy within the country, if there is not enough, then the recommendation is to buy within the region, because the countries of the region usually share the same reference energy market, which is, for example, for Croatian company market of Bosnia and Herzegovina, Serbia, Slovenia. He does not recommend buying energy from Germany precisely because of the volatility of the market that is expected in the coming period, and these are risks that should be avoided since such contracts are signed for a period of 10 years or more. Aleš Jurak, Head of PV Product, along with RESALTA d.o.o., agreed with him. from Slovenia, which mainly signs PPA contracts within the region, but most often in the country where it has branches. The company signed a physical PPA contract of 0.5 MW with Ljubljana Airport and considers the development of the PPA contract essential for the development of the region.
Lejla Mešić Suljić, PPA manager from BayWa r.e. pointed out a number of advantages that such a purchase enables and stated that the company has signed about 1.9 GW PPA contracts so far and that they recently signed the first European agrosolar PPA contract in Spain, a virtual PPA contract that proves all the effectiveness of these types of contracts. She explained the different models and risks and underlined how these contracts are one of the effective ways of spreading renewable energy.
