Orsted is to supply 100MW of electricity to high-performance materials supplier Covestro from the 900MW Borkum Riffgrund 3 offshore wind farm in the German North Sea under a 10-year power purchase agreement (PPA).
Borkum Riffgrund 3 is expected to be fully commissioned in 2025, when the deal will become effective, subject to Orsted’s final investment decision.
Covestro becomes the first major chemical company in Germany to sign a long-term corporate PPA from a new asset with a supplier of renewable energy.
Covestro chief executive Markus Steilemann said: “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.
“At the same time, we also hope that the cooperation with Orsted will stimulate the accelerated expansion of renewable energy in Germany.
“Without green electricity, the chemical industry, but also industry as a whole, cannot make its contribution to ensuring that Germany becomes largely greenhouse gas-neutral by the middle of the century, as specified in the climate protection plan.”
Orsted Offshore chief executive Martin Neubert 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, Orsted 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.”