PPA Advisory Support on the German Market for global leader in the precious metals business
Supporting: Heraeus Precious Metals
The Company
Heraeus Precious Metals is globally leading in the precious metals industry. By combining trading, innovative products and recycling, they offer their customers the industry’s most comprehensive array of services for the entire precious metals lifecycle.
They are one of the world’s largest refiners of precious metals and a leading name in industrial precious metals trading. Thier products are used in a wide variety of industries, including the automotive, chemicals, semiconductor, pharmaceutical, hydrogen and jewelry industry.
The Challenge
Heraeus Precious Metals has set itself ambitious sustainability goals: By 2025, the precious metals division of the Heraeus Group, strives to become carbon-neutral and from 2033 to completely dispense with the use of fossil fuels (Refering to Scope 1 & 2 from a base year 2019). One of the levers to achieve these targets is through a transition to green energy. Heraeus Precious Metals has committed to transition to 100% green electricity by 2025, striving for local solutions, ideally ones that add new green energy to the grid. On top of the self-generation of green electricity on-site, the purchase of electricity from green sources via credible procurement methods plays an essential role.
To further build up its renewable energy portfolio, Heraeus Precious Metals already had several options on the table to cover the electricity demand of its German Headquarters. With a good foundational understanding on Power Purchase Agreements and with existing opportunities lined up, the company needed advice on the ideal technology mix of the PPA (Power Purchase Agreement), hedging volume and support to evaluate the current offers and input on PPA pricing.
Our Expertise
act renewable supported Heraeus Precious Metals by educating key stakeholders on the risks and opportunities for different PPA products including analysis of exposure from a PPA, ideal technology mix, matching consumption load with renewable energy production, hedging ratio and assessing the PPA with investment option. Leveraging Pexapark’s Quant Analytics, we compared the offers received to assess the fair value of the PPA commercial offer, and then conducted a portfolio analysis to show cost-saving potential.
HPM Decarbonization Roadmap
Key Outcomes
Based on this approach, Heraeus Precious Metals was able to decide on volumes to be covered by each renewable energy option and respective technology mix. The team was able to provide feedback on opportunities and negotiate from a position of knowing the relative value of offers on the table. The project concluded with Heraeus Precious Metals signing a 20-year solar PPA with a local company (40MWp). This PPA supports the company´s commitment to transition away from fossil fuels and makes it less vulnerable to price fluctuations.
Further details of Heraeus Precious Metals’ transition to green energy can be found here: https://www.heraeus.com/en/hpm/responsibility/climate/Klima.html