ENGIE and BASF sign power purchase agreement for renewable energy in Europe
November 29, 2021
ENGIE and BASF have signed a 25-year Power Purchase Agreement (PPA) for renewable energy in Europe. Under the PPA, effective as of January 1, 2022, ENGIE will provide BASF with up to 20.7 terawatt hours of renewable electricity in total throughout the term of the agreement.
Multiple European BASF sites will be supplied from ENGIE’s renewable project portfolio in Europe. The electricity will initially come from onshore wind farms located in various sites throughout the Spanish territory in which ENGIE acts as equity investor or energy manager. In the further course, ENGIE will have the option to either deliver power from existing Spanish assets or from future onshore and offshore wind farms.
“BASF and ENGIE have been working together for many years. With this agreement we take a significant next step on our path to climate-neutral chemical production. One important lever is replacing fossil-based electricity with renewable electricity. This long-term contract with a key player in the European energy market secures substantial volumes of electricity from renewable sources for BASF. At the same time, it makes BASF an enabler for green energy triggering additional projects for renewable power in Europe,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE.
Catherine MacGregor, CEO of ENGIE, said: “Thanks to our large, diverse and growing portfolio of renewable energy production, ENGIE is able to provide carbon-free energy and electricity to its clients, including leading multinational companies such as BASF. It demonstrates our ability to accompany them on their own path to carbon neutrality, an achievement we are very proud of. This contract will deliver steady economic and environmental value in the long run for both partners.”
BloombergNEF, the reference in terms of strategic analysis in the field of energy transition, ranks ENGIE first position at the end of July 2021 for signed corporate PPAs. At the end of September, ENGIE has already signed new Corporate Power Purchase Agreements for a total volume of 1.9 gigawatts since the beginning of the year (versus 1.5 gigawatts for the full year 2020), to provide major industrial and tech companies with renewable power.
This agreement is fully aligned with ENGIE’s long-term strategy to develop renewables and BASF’s climate protection goals. BASF aims to reduce its greenhouse gas emissions by 25% by the year 2030 compared with 2018 and to achieve net-zero emissions by 2050.
From 2030 onwards, BASF wants to implement low-emission technologies, such as CO2- free methods for the production of hydrogen and electrically heated steam crackers, which will significantly increase BASF’s demand of renewable power.