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Ørsted, Covestro Announce Record Offshore Deal

Tuesday, December 10, 2019

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Earlier this month, Covestro (Leverkusen, Germany) inked a 10-year corporate power purchase agreement with Ørsted for the acquisition of 100 megawatts of power from the planned Borkum Riffgrund 3 offshore wind farm, which is to be located off the coast of Germany. The deal is reportedly the largest corporate purchase agreement for offshore wind.

According to Bloomberg, the deal will provide Covestro with electricity from the wind farm for 10 years. Overall, Borkum Riffgrund 3 is slated to provide a capacity of 900 megawatts of power and will be fully commissioned in 2025.

Borkum Riffgrund 3 Project

To be located offshore from Germany, in the North Sea area, the third Borkum project will be located near Ørsted's other offshore wind farms Borkum Riffgrund 1 and Borkum Riffgrund 2. Additionally, the wind farm will be built and operated without subsidies, which is made possible by the use of next-generation wind technology, high wind speeds, grid connection costs not being included in the project and other factors.

Ørsted

Earlier this month, Covestro (Leverkusen, Germany) inked a 10-year corporate power purchase agreement with Ørsted for the acquisition of 100 megawatts of power from the planned Borkum Riffgrund 3 offshore wind farm, which is to be located off the coast of Germany. The deal is reportedly the largest corporate purchase agreement for offshore wind.

The project is composed of three ventures—named Borkum Riffgrund West 1, Borkum Riffgrund West 2 and OWP West—that were originally awarded to the company in 2017 and 2018. (West 1 will provide 420 megawatts of power, with West 2 providing 240 megawatts and OWP providing 240 megawatts.) The endeavors, now to be built as one project, were collectively renamed in September of this year.

Ørsted, Covestro Deal

The recent deal marks Covestro as the first major chemical company in Germany that has signed such an agreement with a new project from a renewable energy supplier.

"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.

Steilemann went on to add that the company hopes the deal will help stimulate the expansion of renewable energy in Germany, which plans to be greenhouse gas-neutral by the middle of the century.

"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. 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."

   

Tagged categories: Business operations; Covestro; EU; Europe; Program/Project Management; Project Management; Wind Farm

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