Global food and drink giant Danone will buy green electricity from Europe’s largest solar plant after signing a deal with Iberdrola, as a study predicted renewable power could be in for a “boom year” for agreements in 2021.

Danone will decarbonise its entire Spanish operation through the 10-year contract with the Spain-based renewable energy giant running from 2022.

The power purchase agreement (PPA) covers output from the Francisco Pizarro project that will become Europe’s largest PV plant at 590MW when it comes online in 2022 in Spain’s Extremadura region.

The deal with Danone, whose slogan is 'One Planet, One Health, is the second big corporate PPA struck for Francisco Pizarro. Iberdrola in late 2020 announced the project would supply pharmaceutical giant Bayer, which will also use power from the site to decarbonise its Spanish electricity consumption.

The agreement continues the momentum behind deals between major companies and renewables operators in Spain and Europe as a whole.

As well as shielding their power supplies from the uncertainties of the market, the PPAs allow big corporates to meet stretching decarbonisation goals.

Ángeles Santamaría, CEO of Iberdrola España, said: “Long-term power purchase agreements provide stability to investments and have become the perfect tool for the management of the electricity supply for large consumers who are committed to clean and sustainable consumption.”

Iberdrola is one of the world’s most ambitious renewable energy developers, with the bulk of its €75bn ($88bn) of investments planned over the next six years dedicated to doubling its global base to 60GW.

At home in Spain the group has stressed the benefits of investment in renewables as an economic recovery tool post-Covid, and as a way to help former fossil regions achieve a viable economic transition.

Record 2021

News of the latest big corporate deal came as Spain was tipped to play a key role in an expected 10GW-plus worth of renewable energy PPAs in Europe in 2021, a figure covering total agreements with utilities and traders, as well as corporations.

A study by software and advisory group Pexapark said 2021 has the “potential to be a boom year,” that would beat the almost 9GW of deals struck in 2020, with the market this year also driven by “the emergence of a strong subsidy-free market in Germany and growing offshore wind momentum throughout Europe.

“As offshore wind developers plan for gigawatt-scale projects in the years ahead, 2021 will likely see first large deals for capacity coming online during 2023,” said Pexapark.

Iberdrola was among the leading sellers of renewable power last year, along with the likes of BP Lightsource, RWE, Orsted and Wpd.

The European renewable PPA market until just a few years ago had failed to ignite in comparison to the US, but that has changed, with the CEO of lobbying group WindEurope commenting this week that industrial players were “knocking on the door” of the sector to sign clean power deals.