Signing of a Virtual Power Purchase Agreement (VPPA) with Recurrent Energy
GKN Automotive Commits to Using Renewable Electricity
With the signing of a Virtual Power Purchase Agreement (VPPA)1 with Recurrent Energy, a global renewable energy developer and Canadian Solar subsidiary, GKN Automotive, the leader in drive systems, has announced a major step towards decarbonizing its electricity usage. GKN Automotive has committed to using 50% renewable electricity globally by 2025 and 75% by 2030. The 10-year VPPA agreement will cover 65% of the company’s European electricity load and 30% of its global load.
The Rey I Solar Project in Spain
The Rey I project, a new2 large-scale solar farm in Spain, will be established thanks to a cooperative agreement with Recurrent Energy. This project will help the Spanish grid receive more renewable electricity while also assisting in the decarbonization of the European grid. Over the course of the 10-year agreement, the project will enable the supply of about 200,000 MWh of renewable electricity per year to the European grid, totaling approximately 2 million MWh.
Achieving Net Zero and Reducing Greenhouse Gas Emissions
The company’s SBTi-approved targets to achieve net zero throughout its entire value chain by 2045 and reduce its direct greenhouse gas (GHG) emissions (Scope 1 and 2) by 45% by 2030 include this development as a critical step. The goal of GKN Automotive‘s ongoing pursuit of VPPAs in Europe and South America is to further reduce the amount of electricity it uses for its worldwide operations.
Collaboration with Schneider Electric
GKN Automotive received advice from Schneider Electric, a world authority in corporate procurement of renewable energy and carbon management, during the project selection and VPPA negotiations. Schneider Electric Vice President of Global Renewables John Powers stated: “We are thrilled to assist our client in this historic renewable energy project. This partnership shows how VPPAs have enormous potential to advance sustainability initiatives and hasten the global switch to renewable energy sources.”
- Footnote: A Virtual Power Purchase Agreement (VPPA) is a long-term contract between a renewable energy generator and a corporate off-taker. The off-taker agrees to purchase the electricity generated from the project at a fixed price, providing the generator with stable revenue and enabling the construction of new renewable energy projects.
- Footnote: The Rey I project is a new solar farm, meaning it will be newly constructed as part of this agreement.
