Italian group ERG, an independent renewable energy producer, has signed three Power Purchase Agreement (PPA) contracts with Rete Ferroviaria Italiana (RFI), a subsidiary of the state-owned Ferrovie dello Stato Italiane (FS) group, for a total volume of 1.2 terawatt hours (TWh) over the duration of the agreements. Electricity supply will begin on October 1 and is part of the railway group’s strategy to centralise its energy procurement through its new dedicated entity, FS Energy.
These contracts follow ERG’s award of three out of the five lots offered during Italy’s first public tender for renewable energy procurement with Guarantees of Origin via PPAs. Under the agreed terms, the first contract covers a period of 10 years with an annual delivery of 55 gigawatt hours (GWh), while the other two extend over 5 years for volumes of 60 GWh and 70 GWh per year respectively.
Unsubsidised volumes from the Italian wind portfolio
The energy will come exclusively from ERG’s existing wind power plants in Italy, which are not subject to any public support schemes. This approach allows the group to strengthen its commercial flexibility while meeting growing demand for long-term supply contracts in a market characterised by high price volatility.
The three contracts add to ERG’s broader strategy of securing sales through PPAs on the open market. The group has now contracted around 3.7 TWh of electricity annually, representing nearly 40% of its total production, according to the published data.
A structuring operation for the Italian PPA market
The implementation of these contracts marks a significant step for the development of the PPA market in Italy, historically less advanced compared to other European markets. By partnering with the country’s largest electricity consumer, ERG strengthens its position in a strategic segment of the power trade without depending on public incentives.
According to the agreed conditions, all energy delivered under these contracts will carry Guarantees of Origin certifying its renewable source, in line with the requirements of the FS group’s tender specifications. The gradual centralisation of the public group’s energy needs through FS Energy is expected to lead to further similar tenders in the coming months.
