New Ground: Spanish Firm Signs PPA for Crowdfunded Solar Plant

A Spanish firm has broken new ground in the complex world of
solar contracting with what is thought to be Europe’s first
large-scale power-purchase agreement for a crowdfunded plant.

Holaluz, a clean-energy retailer, signed up to take the output
from up to 75 megawatts of solar capacity to be built over the next
three years by Fundeen, a specialist renewables crowdfunding
platform, in Spain and Portugal.

The move is significant in the evolving solar PPA landscape
because until now crowdfunded projects in these markets have only
been able to take advantage of self-consumption or feed-in tariff
payback models, said Holaluz’s PPA lead and chief legal officer
Daniel Pérez Rodríguez.

At the same time, the concept could allow PPAs to be negotiated
between smaller plant owners and offtakers, by opening up a project
funding route that does not rely on costly bank financing.

Fundeen itself has projects in France that have PPAs, but
“these are with the distribution company, EDF, and they were
negotiated by the [third-party] project developer,” Nacho
Bautista, Fundeen’s CEO and co-founder, told GTM.

With the Holaluz agreement, he said, Fundeen will be able to go
out to developers with a PPA in hand, potentially speeding up the
development process.

Fundeen allows individuals to invest 500 euros ($567) or more in
renewable energy plants and get an average annual return of 7
percent. The largest project in the
company’s portfolio
so far is a 1-megawatt project in
Córdoba, Spain, which is looking for €555,800 (roughly
$630,200).

Although the agreement with Holaluz covers up to 75 times that
amount, the capacity will be divided into smaller plants and some
may involve bank finance if crowdfunding cannot cover the full
investment required.

Pérez said Holaluz faced the same offtaker risks from
crowdfunded plants as it would from those financed any other way.
And tapping into Fundeen’s portfolio would help Holaluz stay away
from having to rely too heavily on a single developer. “We prefer
to diversify,” he said.

Another potential benefit for Holaluz is that it could offer
co-ownership of Fundeen solar plants to its customer base, although
at this point the details of how such an offer might work have not
been defined.

The Holaluz announcement comes amid growing levels of PPA
innovation. PPAs have traditionally been restricted to large
developers, plants and offtakers, such as utilities and
corporations the size of Apple or Microsoft.

But interest in the concept is spreading in the corporate
sector, which accounted for almost a quarter of U.S.
deals in 2018
. Now even the
Sydney Opera House
in Australia has a renewable PPA.

As more and more companies pile in, lawyers are having to come
up with new PPA concepts to deal with an expanding range of offtake
requirements.

This has led, for example, to aggregated PPAs involving multiple
offtakers and to products such as the
solar block-and-index contracts
pioneered by 7X Energy in the
U.S.

An underlying problem in widening the PPA net is that solar
contracts are often fiendishly complex, said Pérez.

Holaluz recently spent six months negotiating its first
wind-based PPA, he said, and the task was only possible because the
company has its own in-house legal team and did not have to pay a
firm to do the work. “It’s a time thief,” he said.

This has thus far prevented smaller businesses and individuals
from cashing in on the renewable PPA trend.

Yet while platforms such as Fundeen are now allowing ordinary
citizens to co-own PPA-backed solar plants, there has also been
progress in the development of standardized European terms that
could pave the way for simpler, smaller offtake agreements.

RE-Source, a European platform for renewable energy sourcing
backed by bodies such as SolarPower Europe and WindEurope, has long
been working towards a standard corporate PPA that could be applied
across a wide range of scenarios.

This month, a European Federation of Energy Traders (EFET)
“standard corporate PPA” was endorsed by EFET’s legal
committee.

EFET
tweeted
that the move was “set to facilitate further uptake
of corporate PPAs by bringing the cost of transaction and the
length of negotiation down to a minimum.”

Source: FS – GreenTech Media
New Ground: Spanish Firm Signs PPA for Crowdfunded Solar Plant