Power Purchase Agreements
Power Purchase Agreements (PPAs) are key to helping us reach our net-zero target. They refer to a long-term electricity supply contract between a corporate buyer, Holcim in this case, and a renewable power supplier. Prices, amount of electricity, and renewable sources to be supplied are some of the specifications often outlined in the PPA.
For instance, in the US, we have entered into our first virtual power purchase agreement (VPPA) linked to renewable electricity generation in Texas, meaning that 38% of our power consumption at all of our production facilities in the state comes from wind generation.
In Europe, our teams in Poland entered into a similar agreement, which covers 30% of our total power consumption in the country. To further boost the share of electricity sourced from renewables, Holcim Germany plans to secure 50% of its plants' power needs from a new offshore wind park that will become operational in 2025. And by 2023, 40% of our electricity in Spain will come from wind and solar, and hydropower will supply over 40% of our electrical consumption in Switzerland.
In Argentina, we signed a 10-year power supply agreement with Pampa Energía, helping us secure 65% of our electricity needs from wind generation.