Montel Magazine 3 - 2020 - Page 28

Going double Dutch with PPAs and GOs

Holland is seeing growth in power purchase agreements ( PPAs ) and guarantees of origin ( GOs ) amid a phase-out of subsidies and renewed demand for local green energy .
By Karolin Schaps » newsdesk @ montelnews . com
A handful of Dutch PPAs with large corporates , including Philips , AkzoNobel and Microsoft , have kick-started the PPA market in the Netherlands , where heavy users have traditionally opted for energy procurement via incumbent suppliers .
“ PPAs are more important than ever in the Netherlands , certainly for offshore wind because I don ’ t see there ever being a subsidy again . The PPAs are now the sole revenue stream ,” says Marten Turksema , owner of Dutch-based PPA advisory Source4Energy .
The Netherlands was among the first countries to award a subsidy-free offshore wind farm permit in 2018 and it has since awarded two more . The tenders have marked the start of a trend that sees a winding down in subsidy payments to renewable energy projects in the country .
The new offshore wind farms are yet to announce PPAs , but older projects attracted much interest from corporate offtakers . Dutch utility Eneco , for example , has signed corporate PPAs covering nearly its whole share from the Borssele 3 and 4 offshore wind farm which it is building in a consortium with Shell , Van Oord , DGE and Partners Group .
Companies including Microsoft , Royal Schiphol Group and Dutch nutrition specialist DSM have inked agreements to purchase power from Borssele 3 and 4 .
In this new reality of looming subsidy cuts , project developers are increasingly searching for customers who can lock in demand over a long period . With much of the focus thus far on the ‘ low-hanging fruit ’ of large industrial and information and communication technology users , interest is shifting to medium-sized companies .
” Certainly for us as a developer , having a route to market and developing the field of corporate PPAs much wider than the big ones might prove to be quite crucial for future developments ,” says Tjiwolt Wierda , finance director at renewable energy developer Infinergy .
The company recently launched , together with Vattenfall and Dutch engineering consultancy Royal HaskoningDHV , a corporate PPA collective which offers medium-sized users direct access to electricity generated from smaller-scale plants .
In its first deal , the collective provides Royal HaskoningDHV with around 4 GWh of electricity from Infinergy ’ s 7 MW Windpark Ferrum near Amsterdam . Vattenfall enabled the PPA contract and supplies the customer with electricity when the wind farm does not produce sufficiently .
However , landing corporate PPAs is not always a guarantee for securing project finance . Dutch Rabobank has warned that , initially ,
Montel Magazine 3 – 2020