Fraunhofer IOSB-AST has assessed the economic viability of long-term electricity procurement from a solar park for Stahlwerk Thüringen GmbH (SWT), providing a basis for further negotiations. The analysis highlights the role renewable energy can play in supporting a cost-effective electricity supply for industrial consumers.
Can large-scale photovoltaic plants offer attractive long-term electricity deals to industrial consumers whose load profiles fluctuate by tens of megawatts within minutes? The Applied Systems Engineering division of the Fraunhofer Institute for Optronics, System Technologies and Image Exploitation (Fraunhofer IOSB-AST) examined this question in an analysis for German steel manufacturer Stahlwerke Thüringen GmbH (SWT). The study aimed to identify the threshold price at which sourcing solar power via a long-term “pay-as-produced” power purchase agreement (PPA) becomes economically viable for an energy-intensive operator.
IOSB-AST points to volatile spot market prices, geopolitical uncertainty, and regulatory shifts as key factors complicating long-term cost planning for energy-intensive industries. In this context, long-term PPAs with renewable generators are seen as a “promising approach,” enabling predictable procurement costs over terms of 15 years or more and partially insulating industrial consumers from short-term price fluctuations.
