The 288 MW Butendiek offshore wind farm situated in the German North Sea has secured a second long-term Power Purchase Agreement (PPA).
Under the new agreement, BKW Energie AG, a Swiss energy utility, will purchase 18 per cent of the wind farm’s total production, equivalent to over 200 GWh annually, over the long-term.
Amanda Niklaus , Head of Renewables PPA Origination at BKW Energie AG, said: ”We are delighted to have secured this PPA with OWP Butendiek, which gives us access to a large and dependable source of renewable energy. This PPA allows us to grow our renewable energy portfolio and provide our customers with clean electricity.”
The agreement, facilitated by market intelligence, software and advisory business Pexapark, marks the second PPA secured by Butendiek in recent months, the first being announced with a multinational offtaker in October 2023 to supply green hydrogen production.
Björn Nullmeyer , Managing Director at wpd and Butendiek’s Director, said: ”We’re pleased to confirm this second PPA for Butendiek, locking down a secure long-term revenue stream for the project. These deals demonstrate how offshore wind power, a vital component of Europe’s green energy transition, can sustain its success beyond tariff periods.”
Together, the two agreements, which commence in July 2024, account for 80.5 per cent of Butendiek’s total production capacity, with the remaining portion of capacity continuing to trade on the merchant market, benefitting of the German EEG scheme, OWP Butendiek said.
According to Pexapark, which supported both agreements, the post-subsidy renewables market requires investors to build sophisticated energy trading strategies as a growing number of assets transition away from EEG subsidies in the foreseeable future. This is essential for navigating market volatility, streamlining operational management and boosting profitability.
Mathieu Ville, Head of PPA Transactions, Pexapark, said: ”This PPA is another step in the right direction for the German wind industry, as it demonstrates that existing offshore wind assets can achieve attractive upside on their post-EEG investment case, by leveraging the PPA market. We look forward to working with more producers and offtakers across Europe that are looking to optimise their revenue streams as these subsidies are gradually stepping down.”
Butendiek , located 32 kilometres off the island of Sylt, and 53 kilometres from the German mainland, is owned by a consortium consisting of CITIC Pacific Limited, Industriens Pensionsforsikring, ITOCHU Corporation, Greencoat Renewables, Octopus Energy Generation, and wpd.
The wind farm consists of 80 Siemens wind turbines with a capacity of 3.6 MW each. Construction started in early 2014 and the wind farm was completed in 2015, providing the equivalent of 370,000 households with renewable energy.