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The company has signed power purchase agreements (PPAs) with eleven industrial customers as well as one large municipal utility for the 332 MW Nordsee Ost and the 302 MW Amrumbank West projects. The corporate off-takers include Messer, Telefónica, Vodafone, and ZF. The contracts, which will commence in 2025 for Nordsee Ost and 2026 for Amrumbank West, are largely for a duration of ten years. Depending on customer requirements, they will provide for direct purchase (pay-as-produce), scheduled delivery with wind farm profile (as nominated), or as a baseload delivery. The power produced by the projects is already completely contracted to Deutsche Bahn under PPAs signed in 2019, 2020, and 2021. With the latest agreements, all of the electricity generated by these wind farms has been contracted from 2026 onwards.
The Amrumbank West was commissioned in 2017, while Nordsee Ost was brought online in 2015. Both wind farms required an investment of ~€1.4bn each and currently receive individual aid under the German EEG Renewables Act, which is set to expire in 2024 and 2025, respectively. The EEG act came into force in 2000 and acted as a major stimulus for the development of offshore wind technology in Germany through a system of targeted incentives. It guaranteed acceptance and priority access to renewable energy and introduced fixed payments. The act was reformed in 2014, with the aim of further facilitating the integration of renewable sources within the electricity market by providing the operators of major new plants a route to directly market the produced power.
In recent years, RWE has ramped up its corporate PPA activity for offshore wind farms, driven by rising demand from large industrial customers in Germany and volatile PPA prices that contracts with utilities less attractive. In Jun’22, the company formed a 'Green Mittelstand Fund' with Commerzbank to assist medium-sized industrial companies in Germany in gaining access to a proposed 1 GW project's power output through PPAs.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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