German investment firm KGAL has inked a ten-year power purchase agreement (PPA) with Edison, an Italian utility and subsidiary of EDF. This agreement pertains to the power generated from KGAL's 150MW Tuscania solar project, currently under construction in central Italy. The project is expected to be commissioned in the second half of 2024 and signifies a pivotal moment for KGAL, which has been channeling substantial resources into clean energy ventures in recent years.
KGAL's funding for the Tuscania solar project was made possible through the fourth round of its KGAL ESPF fund, a renewable power financing initiative that has committed a staggering €1.3 billion (US$1.4 billion) to 33 wind and solar projects across Europe. These combined projects boast an impressive capacity of 2.2GW.
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Edison, on the other hand, is committed to meeting its clean energy targets and achieving the 2050 decarbonization goals. Fabio Dubini, Edison's Executive Vice President of Gas and Power Portfolio Management and Optimization, stated, “Thanks to this agreement, we have made it possible to create a strategic infrastructure for the energy transition.” He emphasized how this collaboration with KGAL aligns with Edison's clean energy aspirations and offers a vital boost to the renewable energy market.
Earlier this year, Edison announced ambitious plans to invest €5 billion (US$5.3 billion) into expanding its renewable capacity. The goal is to increase its installed renewable capacity from the current 2.1GW to an impressive 6GW by 2030. This substantial growth will see renewables' contribution to Edison's energy production portfolio rise from 27% in 2020 to 40% by the end of the decade.
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Edison is particularly eyeing growth in the solar sector, with plans to add 2GW of new solar capacity by 2030, surpassing its goals for wind capacity and renewable hydrogen production. These investments are especially significant given Edison's historical reliance on thermoelectric power. Recent years have seen an increase in electricity sourced from thermoelectric sources, from 12.1TWh to 15.7TWh between the 2021 and 2022 financial years.
During this same period, electricity generated from Edison's renewable facilities slightly dipped from 2TWh to 1.9TWh, while electricity procured from other sources, including PPAs, decreased marginally from 18.1TWh to 18TWh. The recent agreement with KGAL is poised to reverse this trend, although questions linger regarding the scale of Edison's proprietary renewable portfolio.
