Energy company ERG’s board of directors have approved a plan to invest €1.9 billion (US$2.31 billion) to add 1.5GW of renewable energy capacity to its portfolio.
The Italian group has unveiled its 2021-2025 business plan, which states that it will raise its installed renewables capacity to 4.7GW by completing 400MW of projects in the UK, Poland, France and Sweden that are currently under construction, replacing 200MW of Italian wind projects, and adding 300MW of greenfield wind and solar projects, as well as acquiring 600MW of further capacity from M&A transactions. ERG said it will also increase the headcount in its renewables development business to 100, up from 80 in 2020, while some operations and maintenance (O&M) may be brought in-house depending on the partnership opportunities available in the markets it operates in.
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ERG has also targeted Europe’s emerging power purchase agreement (PPA) market, announcing on Friday (14 May) it has signed a ten-year deal with technology company TIM, and will supply the company with 3.4TWh of clean energy until 2031.
“Since our last business plan in 2018 there have been changes in the renewables industry,” ERG chief executive Paolo Luigi Merli said on a call with analysts today (17 May), adding that “the huge potential of renewables…is not moving forward as fast as it should be”. The CEO noted that bottlenecks in permitting and grid connections presents a challenge for future deployment. He said the business would seek new renewables investments with “lower” but more stable returns, such as PPAs and Italy’s power auctions.
The PPA market, he said, “is gaining progressively across Europe. Corporate PPAs are on the rise with clear prevalence in Nordics and Spain. Italy in this context still lacks behind.”