Iberdrola’s recent 10-year virtual power purchase agreement (PPA) with Spanish rail operator Renfe is more than just a business deal; it’s a bold stride towards decarbonising the transport sector. The agreement, securing 3,700GWh of onshore wind electricity, sends a clear signal to the energy market: renewable PPAs are not just viable, but crucial for long-term sustainability and price stability.
Renfe will receive 370GWh of renewable energy annually, equivalent to the output of 190MW of wind capacity. This isn’t just about powering trains; it’s about securing a stable energy future amidst market volatility. “PPAs are a key tool for customers who want to secure renewable energy at a fixed price and in the long term,” said David Martínez, Iberdrola’s director of Clientes España. This deal underscores the value of zero-emission electrification in a sector that consumes over a third of Spain’s energy.
For Renfe, this agreement is a strategic move. Marta Torralvo, Renfe’s general economic-financial director, emphasised that the PPA supports their energy management strategy and shields them from fluctuating electricity prices. “This contract promotes renewable energy production while stabilising Renfe’s energy costs,” she stated. It’s a win-win: promoting renewables while ensuring financial stability.
The environmental impact is significant. Iberdrola estimates that the agreement will cut Spain’s annual CO₂ emissions by over 2 million tonnes. This is a substantial contribution to Spain’s climate goals, especially considering Renfe’s trains already boast a carbon footprint 20 to 30 times lower than cars or planes.
Iberdrola’s leadership in corporate PPAs is evident. In 2024 alone, they secured 1,251MW in contracts, a 38% year-on-year increase. Their active deals span nine countries, including major economies like the US, UK, and Brazil. Clients range from tech giants like Amazon and Microsoft to pharmaceuticals like Bayer. This diversity underscores the universal appeal and necessity of renewable PPAs.
The deal with Renfe is a testament to Iberdrola’s strategy: leveraging PPAs to drive renewable energy adoption and decarbonisation. It’s a model that other transport operators, and indeed other sectors, should consider. The transport sector is a significant energy consumer, and electrification is a clear path to decarbonisation. PPAs offer a way to make that transition stable and predictable.
This agreement could spark a wave of similar deals, accelerating the energy transition. It challenges the norm that renewable energy is unpredictable and expensive. Instead, it presents a stable, long-term solution. The transport sector, and indeed all sectors, should take note. The future of energy is renewable, and PPAs are a key tool in that transition. The question is not if, but when other operators will follow suit. The time for action is now.