OSLO (Reuters) – Amazon has signed a 10-year offshore wind power purchase agreement (PPA) with Danish renewables firm Orsted, they said in a joint statement on Thursday.
The U.S. tech and online retail giant, which plans to source 100% of its energy from renewable sources by 2030, will take 250 megawatt (MW) of output from Orsted’s planned 900 MW Borkum Riffgrund 3 wind farm in the German North Sea, the firms said.
The deal brings Borkum Riffgrund 3 a step closer to being built, said Orsted, the world’s biggest offshore wind power operator.
The Danish company said it will make a final investment decision for the subsidy-free wind farm at the end of 2021, with operation then scheduled for 2025, but did not provide financial details.
In December 2019, Orsted signed a 10-year fixed-price PPA with polymer producer Covestro, which will take 100 MW from Borkum Riffgrund 3.
Over the past 12 months, the Danish firm had concluded corporate PPAs for an accumulated capacity of 1,301 MW across its global offshore wind portfolio, it said.
PPAs have become a key part of renewable energy project development, providing a reliable revenue stream for asset owners as governments have closed or are closing subsidy schemes as wind and solar power technologies mature.
They typically involve the owner of an asset selling their power to a third party or directly to a consumer.
The Amazon deal did not change Orsted’s previous financial guidance for the financial year 2020, it said.
Reporting by Nora Buli, editing by Terje Solsvik