Chemical Giant BASF Signs 25-Year Renewable Power Agreement with Ørsted
Chemical and materials giant BASF announced today it has signed a 25-year fixed-price renewable energy corporate power purchase agreement (CPPA) with energy provider Ørsted. Under the terms of the agreement, Ørsted will supply BASF with 186 MW of output from the company’s planned Borkum Riffgrund 3 offshore wind farm in the German North Sea.
The agreement marks the longest term for a CPPA for offshore wind ever announced.
Mads Nipper, CEO of Ørsted and Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE, said:
“Ørsted and BASF share a vision that innovative, zero-emission technologies like large-scale offshore wind can play a significant role in the emission reductions in the chemical industry.”
The Borkum Riffgrund 3 Offshore Wind Farm will have a total installed capacity of 900 MW and is planned to go into full commercial operation in 2025. According to Ørsted, the new CPPA is an important factor enabling the company to make a final investment decision on the wind farm, which is expected at the end of 2021.
The purchase agreement follows the announcement this year by BASF of a series of climate goals, including setting a target to achieve net zero Scope 1 and 2 emissions by 2050, and unveiling plans to invest up to €1 billion by 2025 to reach its targets, with a further €2 billion to €3 billion expected by 2030.
Ørsted recently announced ambitions to become the world’s leading green energy major by 2030 along with a plans to invest $75 billion in green energy from 2020 to 2027.
Looking forward, the two companies stated that they plan to explore areas where their interests can match up to support emission reductions in the chemical industry.
Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF, said:
“This supply agreement with Ørsted is another important step in securing additional renewable energy for BASF. BASF wants to reduce its CO2 emissions by 25% by 2030 compared with 2018. To achieve this ambitious goal, we will have to replace large amounts of fossil energy with renewable energy within the coming years. Ørsted can provide the required additional quantities through the construction of new wind farms to support us in our energy transformation.”
Mads Nipper, CEO of Ørsted added:
“In the common fight against climate change, it’s partners like BASF that will make the difference. The chemical sector has a challenging path towards decarbonisation, but it will also make one of the biggest contributions.”