A PPA model that strengthens local support for renewable energy
Like the rest of Europe, Denmark needs to find a way to solve the climate crisis while ensuring high energy security and competitive electricity prices. Installing more renewable energy is a silver bullet that can solve several challenges at once – but it can also risk local resistance if not approached with inclusion at its core. Reel believes that PPAs - and their inclusive nature - are key to this planned expansion.
Anders Engtoft Meldgaard, CCO of Reel, says:
Our PPA model offers a unique opportunity for companies of all sizes - especially local businesses - to participate in renewable energy development. By directly engaging and benefitting local businesses, these agreements can help foster community-support for renewable projects. We have been very pleased with our collaboration with Villerup Hovedgaard and Momentum Energy Group so far, and we are excited to see Villerup Sol come to life.
Local value creation has been key for the Villerup Sol project. Over half of companies buying power from the new park are from Hjørring Municipality. And the solar park, which will be located at Villerup Hovedgaard, has been designed with strong involvement from the local municipality and neighbours, resulting in no local opposition.
Jørgen Høll, CEO of Skallerup Seaside Resort, a PPA signatory, says of the project’s local aspect:
Skallerup Seaside Resort is not only committed to supporting the renewable energy transition, we are also committed to supporting it locally. We are excited about purchasing power from the new solar park at Villerup, which will be located only 6 kilometers from our company.
Unlocking value for renewable energy developers
Many banks now require PPAs to finance new renewable energy projects, yet PPAs have traditionally been restricted to large consumers like Carlsberg and Novo Nordisk. This has left most companies unable to participate, limiting the pool of potential off-takers and, consequently, making it more challenging for developers to secure financing.
Reel’s multi-buyer PPA model addresses this gap by allowing companies of all sizes to collectively enter PPAs. This expands the market of PPA off-takers and makes it easier for developers to secure financing - a win-win for the energy transition.
Kristian Månsson, Head of Development, Wind and Solar, at Momentum Energy Group, says:
PPAs are crucial for the development of new solar projects, and Reel’s multi-buyer model gives us access to a much larger segment of buyers. We are excited to bring this project to life together with Villerup Hovedgaard, Reel and all the participating companies. It means a lot that we can directly support local businesses in this way.
While ‘multi-buyer’ PPAs can unlock new offtakers for developers they can also become prohibitively complex, involving multiple stakeholders, and legal agreements. Standardising and digitising these contracts, as Reel does, can significantly streamline the process. This not only makes it easier for more companies to enter PPAs, but also for developers to bring new solar and wind projects to market.
As Vibe Gro from Villerup Hovedgaard explains:
The energy market is complex, and Reel’s expertise in handling the legal and financial complexities of PPAs has been essential in realising this project. Securing local support has also been a key priority in developing this project, and the PPA has enabled strong partnerships with local companies, in addition to a park design that is thoughtfully adapted to the willow-tree landscape.
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