Nucor is demonstrating its environmental commitment with the signing of a 15-year Virtual Power Purchase Agreement (VPPA) for 250 megawatts of new solar energy in Texas. The agreement with EDF Renewables North America is Nucor’s first VPPA and the largest of its kind in the steel industry.
EDFR plans to begin construction on the solar project in the summer of 2022 with electricity production slated for 2023. The expected annual output of the solar facility will be equal to the electricity consumed by nearly 50,000 average Texas homes.
“Nucor is one of the most efficient and cleanest steel producers in the world, and we are always looking for ways to reduce our carbon footprint. That is why we are proud to make our production process even cleaner by supporting the development of this solar energy project,” said President and CEO Leon Topalian. “We are already North America’s largest recycler and supporting the addition of more clean power to the regional grid via this agreement further demonstrates Nucor’s commitment to sustainable steelmaking.”
Ryan Pffaf, executive vice president, Grid-Scale Power at EDF Renewables added, “Nucor’s decision to procure solar energy allows this project to move forward into construction, which will provide an economic boost to the local economy through new construction jobs and expanded tax base.”
What is a Virtual Power Purchase Agreement?
A VPPA is a financial contract in which a company agrees to purchase a project’s renewable energy for a pre-agreed price. When the energy is sold, the project receives the current market price; if it is higher than the fixed VPPA, the buyer receives the difference, and if lower, the buyer pays the difference to the project.
Explains solar developer Urban Grid: “In this way, a Synthetic PPA acts as a financial hedge against volatile electricity prices. Typically, the buyer receives the project’s Renewable Attributes, or Renewable Energy Certificates (RECs). Because there is no physical delivery of power, the VPPA is a great option for large electricity consumers with a fragmented/distributed electric load to support the development of new renewable energy resources.”
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