(Montel) Swiss trading firm DXT Commodities has agreed a seven-year, three-way power purchase agreement (PPA) with Italian renewables firm Fera and steel producer Duferdofin Nucor, marking Italy’s first corporate wind power PPA, DXT said on Thursday.
DXT would buy the output from Fera, guaranteeing it a fixed income and sell it on to Duferdofin Nucor, which sought to secure itself against the risk of possible power prices spikes.
“In the current environment, where new renewable investments don’t benefit from state subsidies, PPAs represent the only possible answer to the challenging growth targets of renewable energy that have been set both at national and international level,” said Nicola Stricchiola, head of power trading at DXT.
The firm was already working “to replicate the structure on other projects” with other “carefully selected partners”.
Non-subsidised renewable energy represented a great way to secure a long-term fixed price, said Antonio Gozzi, chairman of Duferdofin Nucor.
The firm hoped the deal would serve “as a model for the entire industrial sector in Italy”.
Demand for PPAs in Europe has taken off in recent years amid plunging costs of generating power from renewable sources, the phasing out of feed-in tariffs and companies looking to consume more green energy.