Aliaxis, the pipes and fittings manufacturer, has signed its first power purchase agreement in Europe. It covers a large share of the group's European electricity use for ten years. The power will come from a solar park in Lazio that, when the contract was announced, had not yet started construction.
Key takeaways
- Encavis signed a 10-year power purchase agreement with Aliaxis, announced on 19 February 2024, under which Aliaxis will settle around 50 GWh a year produced by Encavis' Montefiascone solar park in Lazio, Italy, about 500 GWh over the term.
- The Encavis contract is Aliaxis' first PPA in Europe and is expected to cover a significant portion of the electricity consumption of Aliaxis' European businesses.
- Leap records 30.15 MW of capacity offtaken by Aliaxis from the 38 MW Montefiascone solar park, about 79 percent of the plant.
- Encavis acquired the Montefiascone solar park from its developer Psaier.Energies in April 2023; construction was estimated to start in September 2024, with grid connection planned for 2025.
- Enerdatics records 30 solar PPAs in Italy announced between January 2023 and June 2024; 24 disclose a term, 15 of those run for ten years, and none discloses a tariff.
How can a buyer contract power from a plant that has not been built?
By agreeing the terms now and taking the power when the plant starts producing. This is common in corporate PPAs. A power purchase agreement is a long-term contract under which a buyer agrees to take electricity, or its financial value, from a named source on terms set in advance.
Both sides get something from signing early. The generator gets a contracted revenue stream before it commits to construction, which makes the project easier to finance. The buyer gets a known cost for a large share of its future electricity use, and a named renewable source to report against.
The risk sits in the timing. When the deal was announced, construction at Montefiascone was estimated to start in September 2024, with grid connection planned for 2025. Any delay to that schedule pushes back the date on which Aliaxis' ten years of supply actually begin. The record does not give a start date for deliveries.
What does it mean that Aliaxis will 'settle' the volume?
It suggests a financial contract rather than a physical one. The record says Aliaxis will settle a volume of around 50 GWh a year produced by Encavis. Settle is the language of financially settled agreements, often called virtual PPAs.
In a financially settled PPA, the generator sells its power into the wholesale market as normal. The buyer and the generator then exchange the difference between the agreed contract price and the market price for the contracted volume. The buyer keeps its existing electricity supply and uses the contract as a price hedge, alongside the renewable attributes of the output.
Leap does not classify the contract type for this agreement, so this reading rests on the wording of the record. It would fit a buyer with sites spread across several European countries. A financial contract on one Italian plant can hedge part of a group-wide power bill without moving electrons to each factory.
How much of the plant does Aliaxis take?
Most of it. Leap records 30.15 MW offtaken from a 38 MW park, about 79 percent. The remaining capacity is free for Encavis to sell under other arrangements or into the market.
The contracted volume also implies a yield. Fifty gigawatt hours a year from 30.15 MW works out to about 1,660 MWh per MW. That is in line with nearby Italian solar contracts. Statkraft's contract with iliad Group for a 27.9 MWp plant in Latina, also in Lazio, estimates 48 GWh a year, or about 1,720 MWh per MW.
For Encavis, 79 percent contracted before construction is a strong position. Most of the plant's expected output has a buyer for its first decade, and only around a fifth is left exposed to the market.
Enerdatics' data shows how standardised Italian solar PPAs have become. Of 30 solar PPAs in Italy announced between January 2023 and June 2024, 24 disclose a term, and 15 of those run for exactly ten years. None of the 30 discloses a tariff. Nine have utility or power company buyers such as Statkraft, Edison, A2A and Axpo, and those include the shortest contracts on record, at 1.5 and 2 years. The other 21 are corporate or institutional buyers, from Cargill and Bayer to Supermercati Tosano.
Longer terms sit mostly with onsite contracts. Edison Next's 20-year deal with Berco and the 12-year deals with Bekaert and TIM are all onsite. The longest offsite term in the set is Qualitas Energy's 15-year virtual PPA with Salesforce, the closest comparable to a financially settled contract like Aliaxis'. At ten years, Aliaxis sits at the market's centre rather than its edge.
What does the deal signal for Italy's corporate solar market?
That Italy is attracting first-time industrial buyers with group-wide needs. Aliaxis' contract is meant to cover a significant part of its European consumption, across several countries. Italy offers the yields and the project pipeline to make one large solar contract do that job.
It also shows how sellers use contracts to carry projects through construction. Encavis bought Montefiascone from its developer in April 2023 and had most of its output contracted within a year, before building began. Separately, in September 2023, Encavis secured about $193 million from ABN AMRO and Rabobank for ready-to-build and operating solar projects in Denmark, Germany, Italy and Spain.
The ten-year term matches the Italian norm. The structure is more tailored. A buyer taking most but not all of a single park, on what appears to be a financially settled basis, suggests a contract sized to Aliaxis' demand rather than to the plant.
Frequently asked questions
What is the Aliaxis and Encavis PPA? A 10-year power purchase agreement announced on 19 February 2024 under which Aliaxis will settle around 50 GWh a year from Encavis' 38 MW Montefiascone solar park in Lazio, Italy, about 500 GWh over the term.
Is this Aliaxis' first renewable power contract? It is Aliaxis' first PPA in Europe, according to the record, and is expected to cover a significant portion of the electricity consumption of its European businesses.
When will the Montefiascone solar park operate? Construction was estimated to start in September 2024 and grid connection was planned for 2025.
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