Vattenfall and BASF agree sale on Hollandse Kust Zuid wind farm
Published by Bella Weetch,
Editorial Assistant
Energy Global,
BASF and Vattenfall have signed a contract for the purchase of 49.5% of Vattenfall’s wind farm Hollands Kust Zuid by BASF. The purchase price amounts to €0.3 billion and takes into account the achieved status of the project. Including BASF’s contribution to fund the wind farm construction, BASF’s total commitment amounts to approximately €1.6 billion. Closing of the transaction is expected in 4Q2021, subject to the approval of the relevant authorities.
Offshore construction of the wind farm will start in July 2021. Once fully operational, the wind farm will be one of the largest offshore wind farms in the world with 140 wind turbines and a total installed capacity of 1.5 GW. The Hollandse Kust Zuid wind farm will also be one of the first fully merchant offshore wind farms in the world which does not receive any price subsidies for the power produced. The project is expected to become fully operational in 2023. A significant part of the electricity production of the wind farm is reserved for Vattenfall’s Dutch customers.
BASF is acquiring the electricity from the wind farm for its ownership share through a long-term power purchase agreement (PPA). It will enable BASF to implement innovative, low-emission technologies at several of its production sites in Europe. BASF’s Antwerp Verbund site will benefit from the renewable power to a significant extent. The BASF Antwerp site is one the largest chemical production sites in Belgium and the second largest BASF Group site worldwide.
The supply scheme to other BASF sites in Europe will depend on the further development of the respective regulation for renewable energy. The wind farm will also support the Netherlands in reaching its target share of renewable power generation and greenhouse gas reduction targets. BASF has more than 1500 employees in the Netherlands who develop, produce and sell products for many sectors at various locations.
Vattenfall has a mission to enable fossil-free living within one generation. In order to reach this goal, the company invests heavily in renewable energy. Offshore wind plays an important part in reaching its goals. A cornerstone of the company’s growth strategy is to look for partners to balance the significant investment costs of its future assets. Strong investors will support Vattenfall to accelerate and drive the transformation of the energy landscape since it will open up financial space for new investments in renewables and decarbonisation.
BASF aims to reduce its greenhouse gas emissions by 25% by the year 2030 and achieve net-zero emissions by 2050. One important lever to further bring down emissions is replacing fossil-based electricity with fossil-free electricity. BASF will secure the required amounts of renewable power through a ‘make and buy’ approach. This includes the intention to bring in financial co-investors to this project allowing for an efficient use of capital.
The company is working on scaling up low-emission technologies to industrial dimensions. Beyond 2030, BASF expects to implement technologies such as CO2-free methods for the production of hydrogen and electrically heated steam crackers, which will significantly increase its demand of renewable power. Steam crackers play a central role in the production of basic chemicals and require a significant amount of energy to break down hydrocarbons under high temperatures and pressure into olefins and aromatics. Offshore wind farms can play a key role to supply the required amounts of renewable energy.
For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.
Energy Global's Spring 2021 issue
The Spring issue of Energy Global features a varied spectrum of in-depth technical articles detailing recent projects, future projections, and technological advancements in the renewables sector, from companies including GlobalData, Atlas Copco, Watlow, QED Naval, TRACTO, AB Energy, and more.
Read the article online at: https://www.energyglobal.com/wind/24062021/vattenfall-and-bsaf-agree-sale-on-hollandse-kust-zuid-wind-farm/
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