Engie Italia, the Italian unit of French energy group, Engie, announced it has secured a five year private PPA to sell power from some of its unidentified solar power plants in Italy to the four Italian facilities of Austria-based brick and tile provider, Weinerberger.

The company said in a press release that the contract will be valid for the period 2018-2022, and that the agreed power price will be applied for the entire five year period, without providing further details.

In a statement to pv magazine, however, the company specified that this is the first private PPA closed in Italy between a power producer and a final client outside the SEU regulation for self-consumption, and that it relates to “grid-parity” PV projects like those developed by British company, Octopus Energy in Montalto di Castro, central Italy, which were built with no direct incentives from the Italian government.

The projects in Montalto, however, are not selling power to a final client, but to local power provider, Green Trade under a two year PPA.

Engie stressed in its press release that its corporate PPA virtually connects its power production to a final client, and that this kind of agreement shows how the Italian market is progressing towards long-term contracts, independently from the volatility of the market.

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“The development of the long-term PPAs will make a fundamental contribution to the achievement of ambitious national and European targets for the production of electricity from renewable sources,” Engie Italia’s CEO, Olivier Jacquier said.

Apart from the “grid-parity” projects in Montalto di Castro, the private PPA market has recently started to register increasing activity in Italy, as the current Italian legislation for self-consumption, the so-called SEU mechanism, includes the possibility for owners of PV systems up to 20 MW to sell all or part of the produced power to a single final client through a PPA.

As revealed to pv magazine by Emilio Sani of Italian law firm, Macchi di Cellere Gangemi in December, the exemption from paying system charges for SEU projects, introduced by the Italian government in early 2017, may result in an incentive ranging from €50 to €60/MWh, which adds to the incentive being presented by the possibility of selling excess power to the grid.

“The energy sold through a private PPA does not pass through the grid, and is not charged for grid and system fees, while surplus power can be sold to the grid. This facilitates long-term agreements that may even reach 10 or 15 years,” said Sani.