Vattenfall Expands German Solar Parks for Deals With Business

(Bloomberg) -- Vattenfall AB is expanding its solar parks in Germany to meet companies’ demand for direct supply of low-cost, clean energy.

The Swedish utility has already inked so-called power purchase agreements with a Deutsche Telekom subsidiary and Robert Bosch GmbH, and wants to build 28 new solar parks with more than four gigawatts by 2026 for similar deals, it said in a statement to Bloomberg.

Such partnerships — which help corporate customers secure renewable energy at long-term fixed prices outside of fluctuating power-markets — are seeing “growing momentum and a sharp increase in demand” said Christine zu Putlitz, the company’s director for renewables origination. Vattenfall’s contracts generally run between five to fifteen years.

Power purchase agreements are still relatively new in Europe’s largest economy, where wind and solar have mainly drawn support from long-term subsidy schemes. By 2030 — when Germany aims for 80% of its electricity to come from green sources, up from 50% now — PPAs could cover a quarter of the country’s total electricity demand, according to the German Energy Agency.

The German chamber of industry and commerce — which represents around three million businesses — also supports these contracts and has been pushing for further government incentives to expand them.

©2024 Bloomberg L.P.