Deutsche Bahn seeks 500 gigawatt hours green PPAs, gets credit rating boost

[CORRECTION: DB says it seeks 500 gigawatt hours (GWh) of green electricity, not 500 GW.]

Germany’s railway service Deutsche Bahn (DB) has started a tender process to seek about 500 gigawatt hours (GWh) of renewable power over a period of eight years through power purchase agreements (PPA), the company announced in a press release. “From 2038, Deutsche Bahn will be running on 100 percent green power. We are systematically replacing expiring power plant contracts with renewable energy,” said Torsten Schein, chairman of the management board DB Energie. With the Europe-wide tender, the semi-public company “faces up to its responsibility to protect the environment and climate,” said DB. The German rail company uses about 10 terawatt hours of electricity annually and says it is "Germany's biggest consumer of green power."

With the guaranteed 20-year feed-in tariffs funding period approaching its end for the first German pioneer renewables projects in 2021, the country’s operators increasingly have to look for alternative ways to keep their wind and solar power installations running at a profit. They can sell their electricity to one specific customer. These long-term contracts that are referred to as power purchase agreements (PPA) serve to finance the operation and/or construction of the plant.

Deutsche Bahn has had its credit rating score raised in response to the government’s new 2030 climate plan. S&P Global Ratings, on 8 October, lifted its long-term ratings to “AA” from “AA-”, because the Climate Action Programme 2030 adopted by Chancellor Angela Merkel’s coalition would inject 11 billion euros into Deutsche Bahn over 11 years, reduce value-added tax (VAT) on long-distance rail tickets, and raise air travel surcharges, thus “demonstrating stronger-than-ever ongoing support,” wrote S&P Global Ratings in a press release.