June 13, 2024

Microsoft Seals Solar PPA With Repsol for its Operations in Spain

Repsol and Microsoft have expanded their partnership with six 12-year virtual power purchase agreements (VPPAs) in Spain, totalling 230 MW from wind and solar projects operational by December 2025, bringing their total collaboration to 320 MW since 2021.

Microsoft’s Goal 2025

Repsol and Microsoft have broadened their collaboration with the signing of six new 12-year virtual power purchase agreements (VPPAs) in Spain. These agreements involve three wind farms and three solar plants, with a combined capacity of 230 MW. These renewable energy projects are projected to be operational by December 2025, supplementing their initial partnership announced in 2021. Together, these efforts increase their total contracted capacity to 320 MW.

Microsoft and Repsol both prioritize reducing carbon emissions. Repsol, pioneering in its sector, aims for zero net emissions by 2050 and plans to expand its renewable energy capacity to 9,000-10,000 MW by 2027. Meanwhile, Microsoft has committed to sourcing all its energy from renewable sources by 2025.

The Long-term Partnership

The collaboration between Repsol and Microsoft aims to accelerate Repsol’s digital transformation and the global energy transition. They are jointly developing AI-powered digital solutions. Additionally, Repsol supplies renewable energy to Microsoft in Spain as part of their long-term partnership. Repsol is also expanding its use of Microsoft cloud services, notably Azure, to support its operations.

João Costeira, Executive Managing Director of Low Carbon Generation at Repsol, emphasized that the agreement with Microsoft underscores the critical role of renewable energy in the ongoing digital revolution and highlights Repsol's dedication to decarbonization.

“This deal with Microsoft, a major partner, emphasises the importance of renewable energy in the digital revolution, in which we are heavily invested, and it underscores Repsol's commitment to decarbonisation,” Costeira remarked.

Repsol intends to invest between €3 and €4 billion net by 2027 to develop its project portfolio and achieve its growth targets. Out of the 9,000-10,000 MW of installed capacity planned, half will be located in the Iberian Peninsula and 30% in the United States, following the integration of projects from developers Hecate and ConnectGen. Repsol also aims to expand its presence in Chile and Italy, targeting a combined installed capacity of 1,500 MW by 2027.

Repsol’s Commitment to Renewable Energy

According to a recent report, Repsol has completed its largest solar project in the US, the Frye Solar facility near Kress in Swisher County, Texas. This plant boasts an installed capacity of 637 MW, with 570 MW currently operational, powered by one million solar panels. The company has secured a long-term Power Purchase Agreement (PPA) for 89% of the solar plant's output, ensuring stable returns for this asset.

Federico Toro, Chief Operating Officer of Repsol's low carbon generation in North America, highlighted the significance of this milestone, stating, "Repsol sees the completion of our largest US renewable facility to date as a major step toward our goal of becoming a net-zero emissions company by 2050. Our growth ambitions in this country are substantial."

Repsol's renewable capacity in Texas is 2.09 GW, including the 629 MW Outpost facility and the 825 MW Pinnington plant. Additionally, Repsol operates the Jicarilla 1 and 2 solar power plants in New Mexico, totaling 125 MW, with an extra 20 MW of battery storage. Repsol plans to invest €3-4 billion to develop its global project portfolio, aiming for a global installed capacity of 9-10 GW by 2027.

The expanded partnership between Repsol and Microsoft highlights their shared commitment to renewable energy and carbon reduction. With six new virtual power purchase agreements in Spain totaling 230 MW, these projects are set to be operational by December 2025. This collaboration supports Microsoft's goal of sourcing 100% renewable energy by 2025 and reinforces the importance of renewable energy in the digital transformation. Repsol's strategic investments and growing capacity in Spain are pivotal in achieving these sustainability targets.

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