Northumbrian Water signs offshore wind PPA with Ørsted


Northumbrian Water has signed what is believed to be the UK’s first corporate power purchase (PPA) agreement for offshore wind.

It will take around 100GWh per year from Ørsted’s 573MW Race Bank wind farm, located off the Norfolk coast. The deal is for ten years.

PPAs are starting to become a more common way for large companies to buy power: They agree to pay a fixed rate over number of years, giving themselves price certainty and mitigating market risk.

In a post-subsidy environment PPAs will become an increasingly important mechanism for developers to finance renewable energy projects, though offshore wind may need support for some time yet.

“This PPA is not only a first of its kind in the UK; more importantly it aligns perfectly with our sustainability goals and our ambitions of creating a truly cohesive energy management strategy,” said Graham Southall, Northumbrian Water’s group commercial director. 

“The long-term stability this brings is fantastic for us, and great news for our customers and stakeholders, because it reduces operational costs without compromising our work.”

Alana Kühne, head of corporate PPAs at Ørsted, said the deal “is an important step towards building long-term green partnerships with corporate power customers.”

Northumbrian Water signed a four year energy supply contract with Ørsted last year.

Ørsted owns or has a stake in nine UK offshore wind farms (Barrow, Burbo Bank, Burbo Bank Extension, Gunfleet Sands, Lincs, London Array, Walney, West of Duddon Sands and Westermost Rough).

It also has another four projects under construction (Hornsea One, Hornsea Two, Race Bank and Walney Extension), which would take its offshore interests to 4.9GW, plus two in development (Hornsea Three and Isle of Man), which, if built, would result in an 8GW UK portfolio.

The company, part-owned by the Danish state, plans to build 15GW of offshore wind capacity by 2025.

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