Deutsche Telekom ties up with Vattenfall in German PPA deal

A subsidiary of Deutsche Telekom will be buying electricity from a 60-MW solar park in Germany under a 10-year deal with Swedish utility Vattenfall.

Power & Air Solutions and Vattenfall have signed a corporate power purchase agreement (PPA) for a photovoltaic (PV) farm that will be built in Mecklenburg-Western Pomerania, the state-owned utility said on Thursday. The power plant is scheduled to become operational in the middle of next year.

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Christine Lauber, director sales & origination at Vattenfall, explained that corporate PPAs in Germany have been slow to take off because of the EEG remuneration scheme. As EEG contracts are starting to expire in 2021 the future expansion of renewables will be mainly based on the PPA-model.

“Investors can use the PPA instrument to partially hedge their risks for new wind and solar parks, and customers have direct, long-term access to green electricity. In this way, they can contribute directly to the expansion of renewable energies,” Lauber added.

Vattenfall has set a goal to supply 10 TWh of renewables electricity to corporate European clients under long-term PPAs by end-2023. It already has several such contracts in place in Europe, with some of its most prominent clients being Microsoft (NASDAQ:MSFT), Norsk Hydro and soft drink manufacturer AG Barr plc (LON:BAG).