PPC, industrial players close to establishing 10-year PPAs

Power utility PPC and energy-intensive industries, most notably metal manufacturer Viohalco and building materials producer TITAN, the country’s biggest energy users, appear to have hit the final stretch in negotiations for PPAs promising lower-cost green-energy supply over ten-year periods.

PPC and industrial customers have agreed on most details concerning prospective PPAs but still need to converge on certain legal issues and terms, sources have informed.

Energy-intensive industries are looking to establish PPAs as soon as possible as they remain exposed to the volatility of the wholesale electricity market, which has often increased their energy costs to loss-incurring levels.

As has already been disclosed, PPC, for the first two years of these ten-year agreements, will price its PPA supply deals based on its existing lignite and natural gas-sourced energy basket, while, beyond this period, the company will price its PPAs based on the generation costs of solar and wind energy farms it plans to have developed, by then, in order to supply industrial energy users.

Additional lower-cost energy alternatives appear to be on the horizon for energy-intensive industries, especially since a recent legislative revision enabling RES producers who have already secured tariffs to put aside these agreements for two years and seek better terms and prices in the market, presumably through PPAs.

According to sources, industrial players and RES project investors have already entered negotiations for such deals, which could benefit both sides by offering lower-cost energy for industry and higher tariffs for RES producers.