World's largest corporate PPA for offshore wind signed in Germany
Covestro, a supplier of high-performance materials headquartered in Leverkusen, Germany, has signed a 10-year indexed fixed-price agreement with Ørsted, to offtake green power produced from Ørsted's planned Borkum Riffgrund 3 offshore wind farm which is expected to be fully commissioned in 2025, subject to Ørsted's final investment decision.
Covestro will offtake 100 MW of the planned wind farm's 900 MW total capacity for 10 years, which makes it the world's largest corporate PPA for offshore wind. The PPA will be effective from 2025.
Borkum Riffgrund 3 will be located in the German North Sea adjacent to Ørsted's existing offshore wind farms Borkum Riffgrund 1 and Borkum Riffgrund 2. The wind farm will be built and operated without subsidies. This is made possible by a set of cost drivers including the installation of next generation wind turbine technology, very good site conditions and high wind speeds, grid connection costs not being part of the project, plus the potential for stabilizing revenues through corporate power purchase agreements.
Borkum Riffgrund 3 comprises three offshore wind projects which were originally awarded to Ørsted in auctions in 2017 and 2018 under the names of Borkum Riffgrund West 1 (420 MW), Borkum Riffgrund West 2 (240 MW), and OWP West (240 MW). The three projects were renamed in September 2019 and will be built as one joint project under the name of Borkum Riffgrund 3.
Martin Neubert, Executive Vice President and CEO of Ørsted Offshore said: Our agreement with Covestro is the first tangible step to secure stable revenues for part of the power generated by Borkum Riffgrund 3 which will be built and operated without subsidies. At the same time, this corporate PPA shows that offshore wind can be a reliable source of green power delivering the large volumes required by energy-intensive industrial players. With this agreement, Ørsted and Covestro support the German energy transition and the continued build-out of renewable energy which is urgently needed to reduce carbon emissions in the German industrial sector."
