Adidas is all in with brand commitment after signing 10-year agreement for clean energy — here’s the deal
The energy company Enel X announced last year that it has entered into an agreement with Adidas to supply the athletic wear manufacturer with affordable and eco-friendly solar energy for a full decade.
To fulfill this contract, Enel Green Power said it’s building a new solar plant in Seville, Spain, with a capacity of about 47 megawatts. Currently, the company’s portfolio includes over 90 gigawatts of power across 33 countries. As of July 2023, the facility was still being built.
Starting in 2025, Enel X plans to provide Adidas with 50 gigawatt hours of energy per year.
This arrangement with Adidas is a “virtual power purchase agreement” (virtual PPA or VPPA), meaning that Enel X doesn’t physically deliver the specific energy it generates to Adidas.
Instead, Adidas agrees to pay Enel X a fixed price for the power it generates for the next 10 years, and then Enel X sells its power to the local grid. If it receives less money than Adidas promised, Adidas pays the difference, and if it makes more money, Enel X pays that extra to Adidas.
Adidas typically buys power from its own local grid, but if power prices are high at any given time, the extra money it receives from Enel X’s sales will help pay for the electricity it buys. This benefits Adidas by providing a fixed, predictable cost for electricity; it reduces the risk for Enel X so the company can more easily commit to building a new solar facility; and most importantly, it means that more solar power is being provided to the energy grid.
Like wind and water power, solar is a clean energy source that doesn’t create air pollution while power is being generated. This makes it way better for the environment than fuel sources like oil, coal, and gas, which all generate lots of heat-trapping carbon dioxide.
Cutting out these polluting fuels and switching to clean energy sources is a vital step toward lowering the Earth’s rising temperature.
Enel X’s new facility is set to start helping soon. “The PV solar project located in Spain is under construction and will start delivering power to the grid in the coming months,” the company said in a press release.
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