Current reports
Current report no. 8/2021
Conclusion of an electricity sales contract (PPA)
Legal basis:
Art. 17 item 1 MAR – inside information
Contents of the report:
Zespół Elektrowni Pątnów-Adamów-Konin SA („Company”) informs that on March 12, 2021 PAK PCE Fotowoltaika Sp. z o.o. (a subsidiary of the Company) concluded an electricity sale contract with Polkomtel Sp. z o.o. ("Contract"). The Contract concerns the sale of electricity and guarantees of origin of energy produced by a solar farm with a target installed capacity of 70 MWp, located in Brudzew commune, in Turek poviat, in Wielkopolskie voivodship ("Farm"). The Farm construction project is currently being carried out by the special purpose vehicle PAK PCE Fotowoltaika Sp. z o.o. and its completion is planned for the fourth quarter of 2021.
The Contract for the sale of electricity was signed for a period of 15 years with the possibility of extending it for another 5 years. The total planned volume of electricity sales under the Contract applies to the entire volume produced by the Farm in this period. The production volume of the Farm throughout the entire period of operation will depend mainly on the insolation conditions and the degree of productivity of the installed devices. The estimated production volume of the Farm in the first year of operation will amount to approximately 68 thousand MWh. The produced electricity will be sold at a fixed price, indexed from 2023 on the annual inflation rate. The total estimated sum of revenues from the sale of electricity over a period of 15 years will amount to approximately PLN 300 million.
Both parties to the contract have been adequately secured, including in the event of no electricity production by the Farm, as well as no payment for the electricity supplied by the Farm. The provisions of the Contract also comprehensively regulate issues related to, inter alia, electricity production planning and responsibility for the Farm's commercial balancing.
Signing a long-term contract for the sale of electricity with a recipient with a stable financial position secures the revenue stream for the implemented project and makes it independent of the current fluctuations on the energy market. Such a solution, similar in its structure to auctions for renewable energy sources, is highly effective in the process of obtaining financing for large-scale renewable energy projects. The developed model of cooperation between the producer of renewable energy and its recipient, and the growing interest of commercial energy consumers in securing its supplies at predictable prices, constitute the potential to be used in the implementation of subsequent projects in the field of energy production from renewable sources.
Signatures of persons representing the Company:
Piotr Woźny – President of the Management Board
Maciej Nietopiel – Vice President of the Management Board