Two wind turbines un front of a bright orange sunset
Two wind turbines un front of a bright orange sunset

Onshore wind

Helping manufacturers in Poland meet their green power commitments

02 October 2020

In our first step into the Polish renewable energy market, we acquired Kisielice onshore wind farm. The renewable power from this project has supported international lighting  manufacturer Signify on its journey to carbon neutrality.

Key facts

VPPA with Signify

This virtual power purchase agreement (VPPA) contributed to Signify's target to use 100% renewable electricity in all operations by the end of 2020.

Annual carbon reduction

This VPPA is expected to help Signify reduce its carbon footprint approximately 70 kt CO2e p.a.

Approximately 23,000 cars

VPPA will reduce Signify’s carbon footprint by the equivalent of removing over 23,000 cars from the road.

Opportunity

As the largest electricity market in central eastern Europe by annual consumption1 Poland is currently heavily reliant on carbon intensive generation, with 80 per cent of electricity generated by coal2.  

However, in 2019, the Polish government committed to 21 per cent of gross final energy consumed being generated by renewable energy sources by 20303.

Signify is the world’s leader in lighting and is driving the shift to LED and connected lighting. In September 2020, Signify achieved carbon neutrality across its global operations. With 25 per cent of Signify's global electricity usage in Poland, a green energy solution for its manufacturing footprint in Poland was required to achieve this goal. 

The VPPA is providing revenue certainty for the Kisielice wind farm and demonstrates that the energy generated by renewable assets can play an important role in the acceleration of decarbonising electricity intensive manufacturing.  It also highlights the role that that corporates can play in supporting Poland’s green energy transition. 

The Polish energy market

"More and more firms, like Signify, are setting clear carbon-reduction targets – which is boosting demand for renewable power. We have a well-established track record in financing and delivering these kinds of PPAs and are delighted to have worked with Signify on our first such project in Poland."

Edward Northam
Head of GIG Europe

Actions

For the Kisielice onshore wind farm, our experts were able to bring together an intricate set of contracts, structures, and concepts across fields of expertise ranging from infrastructure investment to project financing, and renewable energy trading to operational asset management.  

We utilised the skills and expertise built through our global experience, into Poland for the first time to finance this project. We created a PPA that hedged the project exposure to merchant power prices for electricity generated by the facility. This provided the certainty of income stability into the future and we were able to reshape and reduce the revenue risk profile, encouraging investors to bring further capital to the project.

Local manufacturer Signify, purchases Kisielice onshore wind farm’s renewable electricity through a virtual PPA structure for its operations in Poland for the next ten years.

Through our market leading green impact reporting, we were able to quantify the carbon benefit of this project to Signify and allow them to track the source of the renewable power through Guarantees of Origin.

Introducing new financing structures and bringing additional capital into the project is enabling future renewable projects to be planned and built on a larger scale than historically seen.

Kisielice onshore wind farm Virtual Power Purchase Agreement

Impact

Kisielice is a milestone for GIG as its first transaction in Poland, and a milestone for Signify as its first European VPPA.  

The wind power sourced under the virtual PPA and supplied to Signify, will be applied to four of Signify’s factories and several offices throughout Poland. The VPPA contributes to Signify’s RE100 commitments, reducing its carbon footprint by 70 kt CO2e per annum – the equivalent of removing over 23,000 cars from the road.

The opportunity is available for local corporates to replicate this approach, helping to decarbonise their own supply chains and operations – in turn supporting Poland’s energy transition.

Awards:

IJGlobal European Renewables Acquisition of the Year, 2019


Footnotes

1. EC quarterly report on European electricity markets, Q2 2019; fig 36.
2. IHSMarkit, European Power Country-Level Balances and Generation Capacity: Monthly, Quarterly, and Annual Historical Data; Poland. 2 Aug 2019
3. https://www.gov.pl/web/energia/draft-energy-policy-of-poland-until-2040

 


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