Power company ENGIE and chemical and materials giant BASF announced today the signing of a 25-year Power Purchase Agreement (PPA), under which ENGIE will provide renewable energy in Europe to help power multiple sites across the continent for BASF.
According to the companies, the agreement will facilitate the delivery of up to 20.7 terawatt hours of renewable electricity.
The PPA follows the announcement this year by BASF of a series of climate goals, including a target to achieve net zero Scope 1 and 2 emissions by 2050, along with plans to invest up to €1 billion by 2025 to reach its targets, with a further €2 billion to €3 billion expected by 2030. Earlier this month, BASF signed another 25-year renewable energy deal with energy provider Ørsted.
Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE, said:
“BASF and ENGIE have been working together for many years. With this agreement we take a significant next step on our path to climate-neutral chemical production. One important lever is replacing fossil-based electricity with renewable electricity. This long-term contract with a key player in the European energy market secures substantial volumes of electricity from renewable sources for BASF. At the same time, it makes BASF an enabler for green energy triggering additional projects for renewable power in Europe.”
The electricity provided under the new PPA will be supplied from ENGIE’s renewable project portfolio in Europe, initially from onshore wind farms located in various sites throughout Spain, with the option in the future to deliver power from existing Spanish assets or from future onshore and offshore wind farms.
Earlier this year, ENGIE unveiled a major repositioning strategy, including plans for major investments in renewables and energy solutions, along with €9-10 billion of asset disposals. The company aims to annually add 3-4 GW through 2025, and anticipates reaching 80 GW of renewables capacity by 2030, with projects including onshore wind, offshore wind and solar across Europe, North America, and Latin America.
Catherine MacGregor, CEO of ENGIE, said:
“Thanks to our large, diverse and growing portfolio of renewable energy production, ENGIE is able to provide carbon-free energy and electricity to its clients, including leading multinational companies such as BASF. It demonstrates our ability to accompany them on their own path to carbon neutrality, an achievement we are very proud of. This contract will deliver steady economic and environmental value in the long run for both partners.”