PepsiCo, Givaudan, Smurfit WestRock, and Statkraft have announced the signing of a 10-year Virtual Power Purchase Agreement (VPPA) tied to a wind energy asset in Spain. The agreement represents the first European renewable electricity cohort under the "pep+ REnew" program, a global platform designed to accelerate decarbonization across PepsiCo’s complex supply chain.
By aggregating the energy demand of strategic suppliers, the consortium secured long-term renewable electricity at commercial terms typically reserved for large-scale utility buyers. The initiative was structured and delivered by Schneider Electric’s global consulting practice, SE Advisory Services.
The pep+ REnew Aggregation Model
Launched in 2022, the pep+ REnew program aims to solve the barriers many small-to-medium-sized suppliers face when trying to enter the renewable energy market. Fragmentation of demand often prevents individual suppliers from meeting the minimum volume requirements for high-impact PPAs.
In this second completed cohort, PepsiCo served as the lead buyer, aggregating its own load with that of Givaudan and Smurfit WestRock. This collaborative framework allows the participants to:
Access Premium Assets: Securing power from large-scale wind projects that require long-term financial certainty.
Optimise Commercial Terms: Leveraging the combined credit and volume of the group to drive down pricing.
Accelerate Decarbonization: Providing a scalable blueprint for other regions within the global PepsiCo ecosystem, which currently supports over 250 companies.
Technical Efficiency through Wind Asset Repowering
The underlying asset for this VPPA is a wind farm in Spain currently undergoing "repowering." This technical process involves replacing older, less efficient turbines with next-generation technology while utilising existing grid infrastructure, such as substations and interconnection points.
This approach offers several strategic benefits for the consortium and the environment:
Higher Output: Newer turbines generate significantly more electricity per unit, maximising the renewable potential of the site.
Lower Impact: Reusing existing infrastructure minimises the environmental disruption associated with new-build greenfield projects.
Faster Deployment: Utilising established grid connections accelerates the delivery of clean energy to the Spanish power mix.
Impact on Net Zero Targets and Scope 3 Emissions
The renewable electricity generated through this 10-year contract is expected to contribute to a reduction of approximately 32,000 metric tons of CO2 emissions per year. This project is critical to PepsiCo’s broader "PepsiCo Positive" (pep+) strategy, which targets a 42% reduction in Scope 3 Energy and Industry emissions by 2030.
Archana Jagannathan, Chief Sustainability Officer for PepsiCo Europe, Middle East, and Africa, emphasised that the agreement is a vital step in reducing emissions throughout the entire value chain. By moving beyond its own operational boundaries, PepsiCo is utilising its balance sheet and market influence to support the Science Based Targets initiative (SBTi) validated pathway to achieve net zero emissions by 2050.
Perspectives from Consortium Partners
The partnership highlights a growing trend of "customer-supplier" collaboration in the climate sector. Willem Mutsaerts, Head of Global Procurement and Sustainability at Givaudan, noted that the agreement translates shared ambitions into tangible action, a core pillar of the company’s 2030 strategy.
Statkraft, the energy provider for the deal, highlighted the scalability of the model. Hallvard Grandheim, EVP Markets at Statkraft, stated that the agreement demonstrates how companies of varied sizes can work together to help drive meaningful climate impact. This marks PepsiCo's second power purchase agreement in Spain, following a project that went live in 2023, solidifying the nation's role as a key manufacturing and clean energy hub for the organisation.
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