Companies around Europe have now signed nearly 5 GW of power purchase agreements (PPAs) with wind farms - almost equivalent to Denmark’s total wind energy capacity.
These PPAs only started in 2014 and mainly in the ICT sector to power data centres, but energy-intensive industries are now also signing them. 2018 saw 1.5 GW of new PPA deals with wind farms and the aluminium sector was the most active with Norsk Hydro and Alcoa signing big deals in Sweden and Norway. Pharmaceuticals and automotive also did their first PPAs, with Mercedes-Benz announcing deals in Poland and Germany. The latter will see wind energy powering Mercedes’ electric vehicle and battery manufacturing.
PPAs give industry long-term energy supply at fixed-prices. Most contracts are around 15 years. Norsk Hydro’s last year was 29 years.
Nordic countries still have the most PPAs, but 2018 saw Germany, Spain and Poland all sign their first PPAs and France and Italy are looking into it as well. The EU Clean Energy Package will help as it requires governments to remove outstanding regulatory barriers to PPAs.
“Corporate PPAs are booming” said WindEurope CEO Giles Dickson. “Industrial consumers across a range of sectors have now bought nearly 5 GW of wind energy via PPAs. 2018 saw a record number of new deals, and the first PPAs in the automotive sector and in pharmaceuticals - and the first in Germany, Spain and Poland. In Germany Mercedes are now going to use wind to power their EV and battery factories - what an advert for the Energiewende! It shows industrial consumers see wind power as competitive and reliable. And it’ll help allow industry to reduce its energy costs. The CO2 benefits are big too: industry accounts for over half of Europe’s electricity consumption. But some countries still have barriers to PPAs. They’ll have to remove them under the EU’s Clean Energy Package. And they should say how in their National Energy Plans this year.”