Power purchase agreements (PPAs) between industrial enterprises and RES producers can drop to competitive levels of less than 40 euros per MWh, as low as 35 euros per MWh, through a new support mechanism being worked on by the energy ministry as a solution for industrial energy costs.

Such price levels, combined with the mechanism’s benefits, should ensure solid profit figures for RES producers and competitive terms, through eco-friendly sources, for the energy needs of energy-intensive industries.

These PPAs will be made available to new RES projects currently not possessing buy-and-sell agreements with DAPEEP, the RES market operator.

This support mechanism, which needs to be endorsed by the European Directorate for Competition, is intended to subsidize electricity absorbed by energy-intensive industries and other enterprises from renewable energy stations. The ministry aims to incorporate the mechanism’s cost into the recovery fund.

RES producers signing PPAs for their new RES projects will be able to use these agreements to secure subsidies through the support mechanism on the grounds of having ensured long-term agreements for the sale of their output.

These PPAs will not burden the RES special account with additional cost as RES producers will be directly paid by industrial producers with whom they have established supply agreements.

According to the plan, the support mechanism will be made available to energy consumers whose energy cost exceeds 20 percent of operating costs.

Besides industrial producers, the mechanism’s availability could be expanded to also cover hotels in the tourism sector, retail food chains and other enterprises operating on a mass scale.

The measure could also serve as a catalyst helping domestic industrial enterprises achieve a swifter transition to RES energy.