The developing post-subsidy solar market in Europe has taken another step forward with the news that UK-based investor Octopus has extended five power purchase agreements in Italy with renewable energy trader EGO Group.
The deal will see Octopus continue to supply EGO with power from a portfolio of five unsubsidised operational PV power plants with a capacity of 63MW until September 2023.
It follows the announcement last week that Octopus had signed a similar PPA deal with Shell, under which it will supply power to the oil major from another five of its subsidy-free solar plants in Italy. Long-term PPAs between solar generators and off-takers such as EGO or Shell are seen as a key plank in the solar industry’s shift away from subsidies towards more market-oriented business models.
Under the latest deal, Octopus will provide EGO with electricity at a fixed contracted price valid until September 2023 for both energy and Guarantees of Origin, for which contracts were also signed. The five sites are located near Montalto di Castro in the Lazio region of Italy and were part of a €23 million (US$26 million) refinancing by Octopus earlier this year in January. EGO now has 103MW of solar PV power contracted with Octopus out of the total 173MW currently owned by Octopus in Italy.
Ed Pitt Ford, senior investment manager at Octopus, said: “In the current photovoltaic market, long-term purchase agreements have a fundamental strategic role. We have been working with EGO for almost two years and have nothing but praise for the manner in which they operate. We are pleased to entrust them with a significant share of our pioneering projects in Italy.”
Stefano Cavriani, founder and commercial director of EGO Group, commented: “This contract is another piece of the robust growth path that our company has undertaken in both traditional sectors and new markets. Following our positive performance in 2017 with turnover of €540 million (US$612 million) and €15 million (US$17 million) of EBITDA, we aim to consolidate our results this year and expand our activity in the PPA and demand-response markets.”