U.K.-based asset manager, Foresight Group announced that construction began on its 3.9 MW solar power project in the municipality of Las Torres de Cotillas, Murcia region, in the south east of Spain.
The company said the project, which is part of a broader 18 MW development in the south-eastern Spanish region, is its second unsubsidized large-scale solar in the Iberian Peninsula. The other one is the Vale Matanças 7.2 MW solar project located in Alcácer do Sal, Portugal, which the company acquired in July.
Both projects, the company specified, are part of a larger unsubsidized solar portfolio acquisition plan Foresight is implementing across Portugal, Spain and Italy.
As for the Torre de Cotillas 1 project, which is being developed by Solarig Global Services, Foresight said the facility will sell power to Spanish power provider, Energya-VM, a unit of Spanish industrial conglomerate Grupo Villar Mir, under a 10-year PPA.
“The project sets an exciting new precedent in the Spanish solar industry as it is supported by a 10 year PPA at a fixed price. This proves Foresight’s capacity to deliver secured long-term revenues to our investors in an unsubsidized context,” said Foresight director Carlos Rey.
The first PPA for a renewable energy project was announced by Portugal’s power utility EDP in July. The company will sell the electricity produced by one of its wind mills located in Spain to local milk producer, Leche Pascual under a five-year PPA.
According to José Donoso, the president of Madrid-based solar association UNEF, the ideal duration for a solar PPA should be more than 10 years, to ensure that the plants can be amortized.