A joint venture between Nuveen Infrastructure and SK Eternix has secured a virtual power purchase agreement (VPPA) with Hyundai Engineering and Construction (Hyundai E&C), with regard to solar photovoltaic projects in South Korea.

The VPPA allows the parties involved to settle the difference between the market power wholesale price and the fixed contract price entered into by power generation companies and consumers.

The arrangement will see the joint venture sell to Hyundai E&C all the renewable energy certificates (RECs) generated by the electricity production of the solar PV projects once they become operational.

Under the terms of the contract, the period of sale for the RECs will run for 25 years or the final date that the projects produce electricity.

The PPA has the potential for wider future cooperation between the joint venture and Hyundai E&C as the clean electricity trading company of Hyundai Motor Group. For Hyundai E&C, the deal is also another step towards reaching its targets under the RE100 initiative – a global corporate clean energy initiative committing its members to achieve 100% renewable electricity.

It not only enables the RE100 implementation, but also allows power generation companies and consumers to generate stable profits and secure renewable electricity respectively.

Francesco Cacciabue, global head of clean energy investments at Nuveen Infrastructure, says: “We are pleased to announce this most recent success of Nuveen Infrastructure and Eternix’s JV. The PPA structure signed with Hyundai is an innovative agreement for the Korean market and one which secures absolute returns from our investment so far.”

“Nuveen Infrastructure is committed to driving South Korea’s clean energy transition and we look forward to continuing our work with partners such as SK Eternix and Hyundai on future projects in the renewables space,” Cacciabue adds.

Nuveen Infrastructure is the global asset manager Nuveen’s dedicated unit for investing in infrastructure assets and companies.

The joint venture between Nuveen Infrastructure and green energy developer SK Eternix was signed in late 2022 with a view to acquire, build and operate 80 megawatts of solar PV projects. Nuveen Infrastructure holds a majority stake in the JV, while SK Eternix owns a minority interest.