Dentons has recently advised Tion Renewables AG (currently being renamed from Pacifico Renewables Yield AG) on a virtual power purchase agreement (PPA) for the sale of its renewable energy to Saint-Gobain, a world leader in light and sustainable construction, over a 15-year period. This is one of the largest contracts of its kind in Poland, with annual electricity production expected to top 190 GWh.
Under the terms of the contract, 100 percent of the electricity produced by Tion’s wind farms will be sold on the market and virtually settled with the purchaser at a guaranteed fixed per-MWh price, including annual step-ups of 2.5% consistent with the Polish Central Bank’s long-term inflation target. The contract will commence in January 2025.
For Tion, this contract represents proof of concept for the use of long-term corporate PPAs as an efficient tool to accelerate the energy transition, while at the same time ensuring stable revenues for electricity producers.
Michał Motylewski, Europe Energy Practice Development Counsel, led the legal team on the transaction, under the supervision of Partner Agnieszka Kulińska, who leads the Renewable Energy Sources team within Dentons’ Energy group in Poland.
“A clear trend is emerging in which PPAs – although still relatively new in the market – are becoming an increasingly popular instrument to support the energy transition in today’s challenging economic situation. We are currently advising several clients with regard to PPAs,” said Agnieszka Kulińska.
“This was a very successful project, which demonstrates Dentons’ ability to support clients throughout the energy transition process, which is so vital for Poland today. Advising Tion on their projects is always a pleasure, and we appreciate the client’s ongoing trust. We are also happy to see the positive impact that PPA-supported projects are having on the rapid development of renewable energy sources in Poland,” added Michał Motylewski.
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