SNCF Energie and Voltalia sign a very long-term direct power purchase agreement of nearly 150 MW, a first in France

SNCF Energie and Voltalia sign a very long-term direct power purchase agreement of nearly 150 MW, a first in France
GUESTROW GERMANY MARCH 07 Electricity pylons stand at sunset on March 7 2011 near Guestrow Germany According to a recent report partially funded by the German government Germanys electricity grid requires an additional 3500km of transmission capability and EUR 6 billion in investment in order to accomodate planned alternative energy projects including solar parks and both landbased and offshore windparks Photo by Sean GallupGetty Images
Published: 27 June 2019 - 11:12 a.m.
By: Baset Asaba

SNCF Energie and Voltalia signed a direct, long-term power purchase agreement. This is the first PPA of this size signed in France between a renewable energy producer and a major independent consumer. With a capacity of nearly 150 MW over 25 years, this corporate PPA is the first of its kind in France and one of the 10 most important in Europe.

SNCF Energie, a 100% subsidiary of SNCF Mobilités, passenger and freight transport operator and service provider, and Voltalia a French and international player in renewable energies have signed the largest corporate power purchase agreement in France. The 25-year corporate power purchase agreement between the two companies is unprecedented in France, both for the length of its term and for the volume of energy supplied.

The PPA covers a capacity of 143 MW, and should provide between 3% and 4% of the power required for SNCF Mobilités train traffic by 2022-2023. For the volume of energy supplied, it ranks among the 10 most important corporate PPAs in Europe.

Firmly committed to protecting the planet, as mentionned in its corporate mission, SNCF Group aims at having renewable sources providing 40 to 50% of the power mix of electricity consumed by train traction by 2025. It is engaged in negotiations with various power producers in order to sign PPAs representing a total volume of 6 to 7 times this first Renewable Energies Corporate PPA, over the next 2 to 3 years.

This agreement creates a direct relationship between SNCF Energie and three new solar power plants to be built, owned and operated by Voltalia.

In contrast to procurement of electricity from already existing renewable plants, long term PPAs allow for new capacity to be built and thus have an actual, direct and sustainable impact on energy transition. A long-term commitment is also essential to selling the electricity at a competitive price.

The three solar plants, with combined capacity of 143 MW, will be built and owned by Voltalia. Slated for commissioning between 2022 and 2023, they will be located in the Gard, in the Occitanie region, and in the Var, in the Sud-Provence-Alpes-Côte-d'Azur region.

Annual production will be more than 200 GWh, wich corresponds to the annual consumtion of around 40 000 french housdeholds[2], that is to say the population of sizeable French cities such as Angoulême, Compiègne or Melun.

SNCF is pursuing its bold, proactive policy of seeking out responsible energy, while operating mobility systems that are already best-in class regarding greenhouse gases emissions (11% of passengers and freight transported in France, but less than 1% of the greenhouse gases emissions of the sector).

For Voltalia, an international pioneer and French leader in supplying renewable energies directly to businesses, the agreement will translate into 76% growth of its portfolio of power plants in France. This contract is an important step towards its 2023 objective of 2,600 megawatts[3] worldwide.

"This first contract with Voltalia, a renewable energy producer, is another big step toward our goal of responsible energy. It's all part of our continuing competitive dialogue on renewable PPAs, launched and spearheaded by our subsidiary SNCF Énergie.

The deal with Voltalia is unprecedented for four reasons: unprecedented volume of 143 MW; an unprecedented 25-year term; an unprecedented price (well below market price); and an unprecedented addition to France's photovoltaic solar capacity, with 100% of the new energy generated on French soil.

Our goal is to expand our use of renewable PPAs to cover 20% of the traction electricity we consume, so that more than 40% of our power mix will come from renewable sources in two to three years. It's a powerful way to show that we are deeply committed to responsible energy and are on track to step up the pace of change!" said Mathias Emmerich, Deputy CEO, SNCF Mobilités.

"Once again, Voltalia has proven that renewable energy is competitive. That was already true in many countries where Voltalia generates and sells market-price energy under long-term contracts. Now it's also true of France, where we will see 76% growth under this agreement.

In a new context for France, Voltalia has positionned itself as a leader in forging direct relationships between renewable energy producers and consumers. We intend to pursue our outreach for large corporations willing to source their electricity from renewable sources, at competitive prices.

I salute the entire SNCF team for their responsiveness and professionalism.They recognized the importance of the energy transition and swung into action to meet this challenge with innovation" declares Sébastien Clerc, CEO, Voltalia.

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