Energy companies building wind farms off the Dutch coast are poised to withhold offering their green electricity to the wholesale market and instead sell some of it directly to large corporates.
Traditionally, developers of offshore wind farms have relied on government subsidy payments to guarantee income. However, with substantial cuts in the support, the operators are now reportedly looking at new avenues to secure their future revenue.
One of the reported ways is the locking of large electricity consumers into multi-year supply contracts (Power Purchase agreements, PPAs). The consumers could be industrial corporates that run heavy machinery or technology companies that need electricity for energy-intensive data centers. Kirsten Barnhoorn, a manager of strategic partner management at Eneco, stated that they were talking to clients about PPAs from planned projects like Borssele 3 and 4.
Eneco together with their project partners Royal Dutch Shell, Van Oord, and Mitsubishi/DGE won a tender last year to build 700 megawatts of offshore wind capacity across two sites, namely Borssele 3 and 4. It is also reported that the Dutch power producer counts Google, Dutch Railways, FujiFilm, among its renewable energy buyers.
The rival offshore wind builder, DONG Energy, which has a Dutch government contract to build offshore wind farms at Borssele 1 and 2, was also reportedly considering securing a large corporate buyer. It has been reported that the tech giant, Microsoft which had located one of its large European data centres in the Netherlands, could be one of the potential customers for Eneco and DONG Energy. Renewable energy strategist at Microsoft, Vanessa Miler-Fels, stated that they were very interested in offshore wind development.
Meanwhile, for corporate buyers, securing green energy contracts could help improve sustainability credentials and also get clarity on aspects of supply and future energy prices.