Ørsted and BASF sign longest-ever-term offshore wind CPPA

Developer Ørsted and chemical producer BASF have inked a 25-year fixed-price corporate power purchase agreement (CPPA) for a wind farm in the German North Sea. This is the longest-term CPPA ever announced in the offshore wind industry.

The CPPA will see BASF offtake 186 MW from Ørsted’s Borkum Riffgrund 3  project. The 900 MW offshore wind farm received planning approval from Germany’s Federal Maritime and Hydrographic Agency (BSH) last month. It is expected to enter commercial operations in 2025. Ørsted  notes that this contract marks a key step in enabling Ørsted to make its final investment decision for the project before the end of the year.

“This supply agreement with Ørsted is another important step in securing additional renewable energy for BASF,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors at BASF SE. “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.”

BASF is also aiming to reach carbon neutrality by 2050, and has described this project as a “first step” in that direction. Meanwhile, Ørsted is aiming for full value chain decarbonisation by 2040. It aims to have 30 GW of offshore wind power installed by 2030, part of a 50 GW renewable portfolio.

Borkum Riffgrund 3, which will be built near Ørsted's operational Borkum Riffgrund 1 and  Borkum Riffgrund 2  offshore wind farms, became the first wind farm in the world to be awarded at EUR 0/MWh, back in 2017. Ørsted farmed down 50% to Glennmont Partners in October 2021.

Mads Nipper, CEO of Ørsted, commented: “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. For this reason, countries like Germany must respond to the enormous demand for renewable electricity by urgently making more seabed available for offshore wind projects and by increasing its ambitions for deploying large-scale renewable energy sources such as offshore wind power. Offshore wind in the North Sea and the Baltic Sea is an abundant source of green electricity that can be unleashed through clearer and more ambitious policies. With our vision of a world that runs entirely on green energy, we aim to further accelerate the build out of renewable energy and support partners like BASF in realising their climate ambitions.”