Free market contracting is in PPA modality, related to the Company's wind power generation portfolio with 27 farms under construction in Northeast region

More than ever, sustainable practices and initiatives such as decarbonization are a must within any sustainability strategy. Pioneer in energy transition in Brazil, Neoenergia is expanding its customer portfolio in the Free Contracting Environment (ACL), focused on clean energy. The company has just entered into an energy trading agreement with Ambar, the energy arm of J&F Group, which includes companies such as BS, Eldorado Brasil Celulose, Flora, PicPay and Banco Original. Under the Power Purchase Agreement (PPA), J&F Group access 300 MWavg of renewable energy stemming from two new wind complexes under construction in Northeast, through trading in free market for the next 10 years, as from 2023.

“The agreement with Âmbar shows the business concern with the environment issue and that our bet in a more sustainable model in the electric sector, started oner 15 year ago, is the right path. More and more, the market values sustainability in business and we continue innovating and striving to meet clean energy demand. The 27 new farms under construction in Paraíba, Bahia and Piauí will triple our installed capacity on wind energy. In addition, the company is advancing in the implementation of two solar farms, also in Northeast, and we are attentive to the opportunities to expand our investment portfolio", says Hugo Nunes, Neoenergia's Liberalized Business Officer.

As the contracting was made under PPA model, it provides several advantages, such as more savings, once the prices are fixed, flexibility and guarantee that energy stems from renewable sources, generating value to the customer, assurance in relation to availability and revenues from the energy trading.

“Access to clean energy sources is strategic for the J&F group, with its companies moving ever faster in reducing greenhouse gas emissions in their production chains", says Marcelo Zanatta, Âmbar Energia's CEO. For example, JBS has recently stated its commitment to “Net Zero 2040", of zeroing its net carbon emissions by 2040. On the other hand, PicPay has already offset 100% of its greenhouse gas emissions in 2020.

Iberdrola Group, Neoenergia's controlling shareholder, has the expertise in this kind of agreement worldwide, mainly in countries such as the United States, Mexico and Spain. In Brazil, other similar agreement was entered into by Neoenergia with Claro in 2020, linked to the first Company's large solar farm, Luzia (PB), which will have 149.3 MWdc power.

Clean energy

The two wind farms that will generate part of the energy supplied to Âmbar are expected to start operations between the second half of 2021, and are part of Chafariz project, under construction in Paraíba's hinterland. The project will feature a total of 15 farms and installed capacity of 471.2 MW, and the construction works were started in 2019, and the first wind turbines started operations ahead the business plan, in late June. At this point, 53 wind turbines are in operation, representing an installed capacity of 184 MW. In total, the project includes 136 turbines, of one of the most modern models in the global market. Project construction has created over 1.4 thousand jobs in the region. In addition, the new asset features operational synergy with Luzia solar farm and transmission line Santa Luzia.

Construction works of Oitis Wind Complex were started in November 2020, three months ahead the business plan. The project involves 12 farms, with installed capacity of 566.5 MW. This energy will have Renewable Energy Certification (I-REC), a seal widely recognized by the market that assures the use of clean energy.

With the new farms, Neoenergia will reach 1.5 GW of installed capacity in wind energy, three times the current power in this source. The increased investment in renewables is in line with the company's commitment to the U.N. Sustainable Development Goals (SDGs) , prioritizing the supply of clean energy and the fight against climate change. In addition, it contributes to Iberdrola's global decarbonization goal, aimed to neutralize Greenhouse Gases (GHG) emissions by 2050.