ATOME Energy, the international green energy company focused on green hydrogen and ammonia production, sales and marketing with current projects in Europe and South America announces the signing in Paraguay of its first major 60MW Power Purchase Agreement enabling a clear path to near term large-scale hydrogen and ammonia production.
- ATOME has signed a new long term 60 MW Power Purchase Agreement ("PPA") with ANDE, the national electricity supply and distribution company of Paraguay
- This is the largest single PPA ever signed between ANDE and an industrial user
- The 100% renewable power is available now and will be provided to ATOME through ANDE's new substation in Villeta on the navigable River Paraguay
- Villeta, 35 km south from the capital Asuncion, is an important industrial centre, home to major fertiliser and cement companies and the main shipping port for exports from Paraguay
- Available baseload renewable power, utilising Paraguay's plentiful hydroelectric resource, supports near term production with no need for costly and time-consuming building out of power generation infrastructure bringing material capex savings
- No consideration has or is payable in relation to the entry into the PPA. Power pricing is competitive and is on the lowest industrial standard tariff enabling ATOME to be cost competitive in the international as well as domestic market place
- ATOME will now move expeditiously to the Front-End Engineering Design ("FEED"), procurement, selection of off-takers, and then final investment decision ("FID") stages for the production of green hydrogen and ammonia at Villeta for domestic and export markets
- ATOME is targeting a fast-track development to commence production from the Villeta facility within three years
- Coming soon after ATOME Mobility's clean fuel for transport project announced in March, this is the first of ATOME's large scale green hydrogen and ammonia projects in Paraguay including the planned 250MW+ facility also in Paraguay
- The entry into the PPA places Paraguay amongst the select club of nations globally with near term realistic large scale future green fuel and fertiliser production and distribution
Power Purchase Agreement
Securing available renewable power at competitive pricing is the single most important factor in the production of green hydrogen and ammonia without which no such project can happen. At a large-scale level, the power that is generated through solar or wind, incurs material investment in money and time building out the infrastructure as well as taking up large tracts of land, creating environment disturbance and utilising valuable mineral resources, the prices of which have increased significantly in recent times.
Against this backdrop, ATOME is pleased to announce the signing of a long term PPA with ANDE, the state electricity and power distribution company of Paraguay, for the supply of 60MW of green power generated through Paraguay's existing hydroelectric power resources. This is the largest PPA ever signed between ANDE and an industrial user. The pricing of the power is on the lowest industrial standard user tariff available and will allow ATOME to compete effectively on both domestic and world markets. No consideration is payable for the entry into the PPA.
The power which is the subject of the PPA is already available through a new substation built by ANDE in Villeta, an important industrial centre 35 km downstream from the capital Asuncion on the River Paraguay. Villeta is the main export port in Paraguay as well as the home of many key industries including fertiliser and cement companies which are ATOME's natural off-take partners.
Whilst the 60MW facility in its own right is of world scale, the signing of this watershed agreement represents the first in a series of ATOME's programme for large scale green hydrogen and ammonia production units and is in addition to the 250MW+ projected facility in Paraguay utilising available power from the ITAIPU hydroelectric dam, the second largest dam by output in the world, in respect of which planning work has already commenced.
With the PPA now executed, the next steps of the project comprise the execution of the planning, engineering, procurement, logistics, build out and commissioning stages. All of these require careful coordination and management but will use existing technology and equipment.
In this regard, ATOME intends to move expeditiously to appoint independent and experienced third-party owner's engineers to manage and value engineer the project through to commissioning and oversee the various contractors involved to deliver the facility on time and budget.
From the appointment of the owner's engineer, ATOME intends to move swiftly to the commissioning of the full FEED work (including procurement and financial planning) with anticipated FID in H2 2022 with the objective of commissioning of the facility and commencement of production at Villeta within 3 years from now.
Off-take and funding
The strategic placement of the facility in Villeta, located conveniently for off-taking will enable ATOME to service both domestic and export markets. The Company has confidence in the future demand for its offering of green hydrogen and ammonia, not least due to the significant and expected long term macro supply disruptions and continuing high price of fossil fuels. ATOME's location and access to existing power and infrastructure will minimise capex and opex, which the Company believes will contribute in making ATOME particularly competitive in domestic and global markets.
The facility in Villeta could potentially produce up to 55,000 tons of green ammonia per year, and ATOME has already been unilaterally contacted by a number of potential off-take partners with further approaches expected to become more numerous as worldwide demand for green fuels and fertilisers increase. ATOME, in view of the volatility of markets and the green hydrogen market's relative immaturity, is adopting a measured approach for committing on any long term off-take arrangement.
In relation to funding, ATOME has various courses open to it and in any event fully intends to avail itself to the maximum of the many and various grant and financial assistance options increasingly available for funding green infrastructure projects and is already in communication with governmental and international multi-lateral bodies, as well as green infrastructure investment funds interested in investing at project level.
Olivier Mussat, CEO of ATOME, commented:
"We are excited to be moving ahead of the already aggressive targets we had set ourselves when we listed ATOME in December 2021.
"Executing our first major large scale power purchase agreement now comes at the right time in light of the urgency to increase the supply of fertilisers, prices for which have nearly quintupled over the past two years, with ammonia prices now over $1,500/MT.
"As we continue to develop our 250MW+ projects in Paraguay, the opportunity to interpose and add 60MW now with this new site in Villeta is very attractive. In itself, this facility would be of world scale in its own right. Villeta with the readily available renewable power is a perfect site to fast track ATOME's first project as it is very convenient for all types of potential off-taker. At 60MW Villeta is also right-sized, enabling us to build our facilities rapidly, with minimal infrastructure build out and opens the opportunity to supply both the domestic and export markets.
"In the meantime, work on our Iceland projects continue with discussions ongoing with power suppliers, government representatives and potential stakeholders.
"Finally, it is important to express our gratitude for the assistance and understanding of ANDE and the Paraguayan government. The objectives and actions of ATOME are totally aligned with Paraguay's commitments on decarbonisation which ATOME fully supports in the mission to make Paraguay one of the world leaders in diversification from hydrocarbon reliant economies and protect the environment for future generations."
Felix Sosa, President of ANDE, commented:
"We are very pleased with the signing of this contract with ATOME, which is the largest power contract signed to date in a key step for the large-scale production of green hydrogen and ammonia.
"This project is not only aligned with the National Policy of using our clean and renewable electricity to promote the economic development of the country, but it also strategically supports the Government's goals for the decarbonisation of Paraguay's economy within the framework of the Paris Agreement."