Record Deal Signed for Offshore Wind Power

(Bloomberg) -- Orsted A/S signed a deal to sell 100 megawatts of power from a German wind farm in the North Sea to Covestro AG, in what the companies said is the biggest corporate purchase agreement for offshore wind.

The deal will supply the German chemical company electricity for 10 years from the 900 megawatt wind farm known as Borkum Riffgrund 3, which is set to be commissioned in 2025. It’s an example of how massive renewable power projects can secure cash flow without government subsidies.

“Our agreement with Covestro is the first tangible step to secure stable revenues for part of the power generated by Borkum Riffgrund 3 which will be built and operated without subsidies,” said Martin Neubert, Orsted’s head of offshore.

Covestro will use the wind farm’s electricity for its factories in Germany. The companies didn’t disclose price details for the power.

The cost of offshore wind has plummeted in recent years as turbines got bigger and cheaper to finance. That’s driven down prices at government auctions intended to support the industry by offering guaranteed power prices, and increasingly led to parks being constructed without any subsidy at all.

To contact the reporter on this story: William Mathis in London at wmathis2@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone, Lars Paulsson

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