Ørsted and Covestro sign the world's largest offshore wind PPA
Covestro, a world-leading supplier of high-performance materials headquartered in Leverkusen, Germany, has signed a 10-year indexed fixed-price agreement with Ørsted, the world-leader in offshore wind, 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.
This makes Covestro, who is listed on the Frankfurt stock exchange and employs 16,800 people world-wide, the first major chemical company in Germany to sign a long-term corporate power purchase agreement from a new asset with a supplier of renewable energy.
Covestro CEO Dr. 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 Ørsted 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."
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."
Covestro will offtake 100MW of the planned wind farm's 900MW total capacity for 10 years, which makes it the world's largest corporate PPA for offshore wind. The PPA will be effective from 2025.