New long-term renewable electricity agreement between ERG and TIM
May 9, 2023
ERG, the leading independent producer of electricity from renewable sources, through its subsidiary ERG Power Generation, and TIM, the leading Group in Italy and Brazil in the ICT sector, through its subsidiary Telenergia, have signed a new nine-year agreement for the supply of 200 GWh/year (Gigawatt hours) of green energy for the period 2023-2031.
The contract will integrate the PPA (Power Purchase Agreement) signed on 14 May 2021 for the supply of 340GWh/year for ten years, with an additional “baseload” volume of 200 GWh annually of 100% green energy produced by renewable plants in ERG’s portfolio, and an update to the related commercial terms.
With this agreement, approximately 34% of TIM’s energy purchases will come from renewable sources through PPAs, strengthening its commitment to pursue the target of 100% green energy use by 2025 and to reduce CO2 emissions, which underpins the Group’s strategy.
For ERG, this agreement constitutes an important outcome, consistent with the strategic target to secure 85-90% of its EBITDA, as set out in the Group’s 2022-2026 Industrial Plan, which was recently updated.
Paolo Merli, ERG’s Chief Executive Officer commented: “We are pleased to have strengthened our partnership with a leading operator in the sector, in a context of significant market volatility in which PPAs represent a strategic tool to stabilise revenue. Supplying additional green energy to TIM, at a fixed price, will contribute to optimising the Group’s risk profile in the management of its renewable asset portfolio”.
Pietro Labriola, TIM’s Chief Executive Officer, commented: “We are the second biggest Italian energy consumer and therefore it is crucial to make choices with the goal of resolving environmental issues. The new agreement signed with ERG will help us to reach the ESG targets we have set ourselves, while at the same time stabilising costs in a context of continued macroeconomic uncertainty. The agreement confirms, once again, the importance of forging robust partnerships which share an industrial vision as well as consideration of the environment”.