Covestro has signed a ten-year corporate power purchase agreement (PPA) with Ørsted to buy the output of 100MW from the Borkum Riffgrund 3 offshore wind project in Germany.
With the ten-year indexed fixed-price agreement, Germany-based Covestro will offtake 100MW of the project’s 900MW total capacity, which makes it the world’s largest corporate PPA for offshore wind.
According to Ørsted, this makes Covestro the first major chemical company in Germany to sign a long-term corporate PPA from a new asset with a supplier of renewable energy.
“By purchasing green electricity, we are underpinning our comprehensive sustainability strategy and preparing ourselves for the expected rise in energy prices and CO2 costs. We assume that this will enable us to inspire and motivate our customers and corresponding value chains towards sustainable industrial production,” said Covestro CEO Markus Steilemann.
“At the same time, we also hope that the cooperation with Ørsted will stimulate the accelerated expansion of renewable energy in Germany.”
The PPA will be effective from 2025, when Borkum Riffgrund 3 is set to be fully commissioned, subject to Ørsted’s final investment decision.
“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,” said Martin Neubert, Executive Vice President and CEO of Ørsted Offshore.
“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.”
Ørsted announced in September it is merging the 420MW Borkum Riffgrund West 1, the 240MW Borkum Riffgrund West 2 and the 240MW OWP West under the name Borkum Riffgrund 3.
To remind, the company secured the rights to build Borkum Riffgrund West 2 and OWP West in Germany’s first competitive tender held in 2017. A year later, in the second auction round, Ørsted won the contract for Borkum Riffgrund West 1.