Canadian Solar and global commodities trader TrailStone have jointly signed a 10-year power purchase agreement (PPA) for the electricity produced by a 17.6MW solar PV plant portfolio in Sicily, Italy.
The portfolio is jointly owned by Canadian Solar (51% stake) and Manni Energy (49% stake), a renewable energy company devoted to engineering, O&M services, and energy efficiency and part of Manni Group, which will also provide turnkey EPC services for the project.
This landmark PPA will cover 100% of the electricity generated and is believed to be the longest-term PPA for a fully unsubsidized solar PV portfolio signed to date in Italy.
The PPA provides stable and predictable power sales revenues via a fixed price floor but also higher generation-weighted power prices due to an upside-sharing mechanism. As part of the agreement, TrailStone will also act as market representative for the portfolio on the Italian wholesale market.
The solar PV portfolio is expected to start producing electricity in the second quarter of 2019. The expected production is approximately 34GWh per annum, equivalent to the annual consumption of 12,000 households in Italy.
TrailStone was advised for the transaction by legal firm Paul Hastings while Canadian Solar was advised by Orrick, Herrington & Sutcliffe.
Manni Energy representative Franco Citron said: “It is an honor for us to have contributed in a project which will allow the Italian market to foster the deployment of this renewable energy source, with a benefit for the entire community.
“The agreement signed by Manni Energy and its valuable partners represents one of the first of this kind in Italy; opening the opportunity to private actors to invest in solar energy with a predictable ROI and at a competitive level of earnings, also in comparison to traditional energy sources. This scheme perfectly matches Manni Group’s sustainability goals.”
TrailStone CEO John Redpath said: “TrailStone’s strategy is to manage wind and solar portfolios while offering value added digitalized services such as virtual power plants to small decentralized production units. Providing long term solutions for new renewable developments puts TrailStone at the forefront of the energy transition”.
Canadian Solar chairman and chief executive officer Shawn Qu said: “This remarkable milestone marks the start of a new era of subsidy-free solar PV in Italy. Nowadays, solar PV plants can sell electricity at lower prices than conventional power plants. This opens up an unprecedented market independent of government support programs.”
Source: Company Press Release.