German chemicals giant BASF and Ørsted have concluded a 25-year fixed-price corporate power purchase agreement (CPPA), under which BASF will offtake the output of 186 MW from Ørsted’s planned Borkum Riffgrund 3 offshore wind farm in the German North Sea.
According to the Danish renewables giant, the deal is the longest CPPA for offshore wind ever announced and an important step in enabling Ørsted to take a final investment decision on Borkum Riffgrund 3, which is expected towards the end of 2021. The offshore wind farm will have a total installed capacity of 900 MW and go into full commercial operation in 2025.
The two companies will also look into where the interests of both companies can match in the future to support emission reductions in the chemical industry. The power purchase agreement should help cover the increased electricity needs of low-emission technologies for BASF and is said to be a step towards BASF’s ambition of becoming carbon neutral by 2050.
BASF is working on scaling up low-emission technologies to industrial dimensions. Beyond 2030 the company aims to implement technologies such as CO2-free methods for the production of hydrogen and electrically heated steam crackers, which are expected to increase its demand for renewable power. In May, BASF and compatriot energy company RWE unveiled a scheme to electrify the Ludwigshafen chemical site with an additional 2 GW of offshore wind power. The company also struck a deal with Sweden’s Vattenfall to acquire electricity from the wind farm Hollandse Kust Zuid off the coast of the Netherlands.