Dive Brief:

• Amazon shattered its own record for corporate offshore wind procurement last week, announcing a 10-year contract for 380 MW of offshore wind off the coast of the Netherlands, two months after announcing a 250 MW power purchase agreement (PPA) for offshore wind off the coast of Germany.
• The latest contract represents half the capacity of a 759 MW offshore wind farm in the North Sea, a joint venture between Shell and Eneco that is expected to begin operation in 2023, and will help Amazon power its European operations. The tech company's December PPA is a 10-year contract with Ørsted for part of its 900 MW Borkum Riffgrund 3 offshore wind plant, expected to be built and become operational in 2025.
• In December, Amazon announced new wind and solar projects in the U.S., the U.K., Europe, Australia and South Africa, totaling 3.4 GW of capacity. The procurements put the company on track to run on 100% renewable energy by 2025, Amazon founder and CEO Jeff Bezos said in a statement.

Dive Insight:

Offshore wind energy in Europe is proving itself through the large contracts of corporate off-takers. The U.S. offshore wind industry remains in the early stages.

While Amazon is the largest corporate off-taker in the 900 MW offshore wind plant in Germany, Ørsted also signed a 10-year PPA with polymer materials supplier Covestro in 2019 for 100 MW, proving out an alternative revenue model for the resource, the developer said in December. Ørsted claims the wind farm will be built without subsidies, based on a set of cost drivers that include corporate PPAs.

Offshore wind has been growing in Europe "for the past two decades and it's natural that the universe of buyers grows with it," Gabriel Martinez, a spokesperson for Ørsted, said in an email.

European energy markets have opened up to corporate procurement in recent years, according to the Renewable Energy Buyers Alliance (REBA). For the past decade, however, government subsidies drove renewable energy procurement in the region.

The offshore wind corporate PPAs in Europe will offer valuable lessons as the resource is built out in different parts of the world, according to the renewables industry.

"Importable lessons from the growth of renewable energy across European markets typically relate to how various EU member states have managed to expedite their project development processes, and therefore cost, without sacrificing, for example, rigor relating to project siting or interconnection agreements," Mark Porter, director of supply chain and international collaboration for REBA, said in an email.

As Amazon seeks to expand its clean energy portfolio, its largest single-site renewable project, the "Amazon-Shell HKN Offshore Wind Project" in the Netherlands, will include a floating solar park, short-term battery storage and the production of green hydrogen. The 759 MW project will be exploring various options for storing power and optimizing the performance of the offshore wind farm.

Some corporations "have reached, or have an executable plan to reach, their goals and targets relating to their U.S. loads, and seek to procure to meet the loads of their international campus – we expect this trend to continue as more companies reach their U.S.-load goals," Porter said.

"An increasing number of companies are seeking to address emissions incurred during the supply chain processes of the goods they sell, including technology companies," he said.