September 24, 2019 / 4:59 PM / 22 days ago

Swiss trader DXT signs solar power deal in Italy with steelmaker ORI Martin

MILAN, Sept 24 (Reuters) - Swiss energy trader DXT Commodities has agreed to buy the output of a solar plant being built in Italy in a five-year power purchase agreement (PPA) with German investment company KGAL and steelmaker ORI Martin.

Under the deal, the largest of its kind in Italy this year, DXT will buy all the power produced by the plant, totalling around 95 GWh, paying developer KGAL a fixed price for the five years.

ORI Martin will then buy the green energy “virtually” from DXT, after it is injected into the country’s power grid, to fuel its steel plant.

The 53 megawatt solar farm, KGAL’s first non-subsidised renewable energy investment in Italy, will start operation in the second half of 2020.

Known as virtual PPAs, these agreements are beginning to gain traction in Europe as companies move to bolster their green credentials and take advantage of locking in prices for their energy.

PPA supporters believe the instruments can help catalyse a broader shift to clean energy sources by funding projects. (Reporting by Stephen Jewkes; editing by David Evans)

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