Amazon.com Inc. will buy power for 10 years from a giant wind farm planned off the coast of Germany, a sign of how some of the biggest green power plants could be built with less government money.
Orsted A/S, the world’s biggest developer of offshore wind farms, will sell power from just over a quarter of the 900-megawatt Borkum Riffgrund 3 wind farm that it’s planning to build in the German North Sea. It’s the largest such deal for an offshore wind farm in Europe.
As green energy scales up, deals like these will be increasingly important. The European Union aims to see investment in wind farms at sea reach about $950 billion in the coming decades as they become a foundational source of energy in the bloc’s move to hit net-zero carbon emissions by 2050.
Until now, the industry has mostly relied on generous government subsidies to make the multi billion-dollar investments needed to install turbines that can be the size of skyscrapers. That’s helped the industry scale up and bring down costs low enough to compete with power plants that run on fossil fuels.
At the same time, corporate giants like Amazon want to cut their own emissions. Power purchase agreements could be a key way for corporations to reach their goals while providing a stable source of revenue for developers such as Orsted.
Companies in Europe have signed agreements to buy 5,169 megawatts of green power in the first nine months of 2020, more than double the amount agreed in all of 2019, according to data from BloombergNEF.
The Borkum Riffgrund 3 project will help Amazon reach its net-zero carbon emissions target by 2040, Nat Sahlstrom, director of Amazon Energy, said in a statement.
© 2020 Bloomberg L.P.