German rail operator holds Europe-wide PPA tender for green power.

German railway operator Deutsche Bahn [DBN.UL] has launched a tender for 5% of its annual electricity supply from renewable sources for the next eight years, aiming to get nearer to its long-term target of 100% green power by 2038.

In a press release issued on Sunday, the company said it would require 500 gigawatt hours (GWh) in total over the period, and would award contracts of the basis of power purchase agreements (PPAs) of varying length and volumes.

“Expiring power plant supply contracts will be successively replaced with renewable energy,” said Torsten Schein, chief executive of DB Energie, the unit responsible for power supply.

The rail operator is Germany’s single biggest power consumer, which already uses 57% of green power in its total procurement of 10 terawatt hours (TWh) per year, 2% of German electricity consumption.

It is due to raise this share to 61% next year.

Deutsche Bahn is due to receive a boost from the latest climate protection measures approved last Wednesday by the German cabinet, that will raise car and air traffic taxes and lower those on rail travel.

The power tender runs to Nov. 18.

PPAs are globally known sales tools that allow developers of new renewable projects to tap into funds from advance sales of their output as security.

They have gained traction in the United States, Nordic countries and Iberia, and are beginning to make inroads into the German green power market which so far has been characterized by fixed support payments.

Certified green power has a high marketing value for companies depending on customers’ trust.

In a related announcement made last month, DB said it would source 25 megawatts (MW) of green power capacity from the Nordsee Ost offshore wind farm owned by Innogy in the North Sea over a five-year period starting 2024.

The power, supplied by RWE Supply & Trading, will constitute the first supply under a German offshore wind PPA.

14 October 2019

REUTERS