Three in green energy deals

Three speciality chemicals companies signed agreements to source more renewable electricity for key sites in February. In Europe, Evonik concluded separate long-term power purchase agreements (PPAs) for solar and wind power, while Arkema signed multiple agreements covering four main sites in the US and Sasol and Air Liquide have concluded a third PPA in South Africa.

Under its new agreement with Swedish state-owned supplier Vattenfall, Evonik will source about 120 GWh/year of solar power for ten years from 2025. This will come from two solar parks at Schleswig-Holstein at the northern tip of Germany, one of which is already complete.

The company subsequently signed a PPA with German energy firm RWE to buy 37.5 GWh/year of electricity from RWE’s Kaskasi offshore wind farm off Helgoland in the North Sea for ten years, starting in 2028. This came into operation in early 2023.

Evonik had concluded its first supply contracts for green electricity from wind power in 2022 and has a target of converting its externally sourced electricity to 100% green by 2030. The new agreement will take this proportion from 35% to over 50%.

Some expect demand for electricity partnerships between producers and industrial companies to increase in the coming years. According to a study by the German Energy Agency, the volume of PPAs in Germany could rise to 192 TWh, about 25% of Germany's total electricity demand.

Meanwhile, Arkema has signed long-term renewable energy agreements that will mean that about 40% of its power needs this year will come from renewable power. The company described this as a major milestone in the goal of reducing Scopes 1 and 2 greenhouse gas emissions by 48.5% from 2019 to 2030.

Under these deals, Tennessee Valley Authority and Entergy are expected to supply about 35 GWh/year and 60 GWh/year of solar electricity to the sites at Calvert City, Kentucky, and Beaumont, Texas, respectively. 3Degrees will supply green e-certified renewable electricity certificates for the decarbonisation of approximately 57 GWh/year of electricity for those at Chatham, Virginia, and West Chester, Pennsylvania, plus all Bostik sites in the US.

In 2022, Arkema had agreed to source all of the energy needs of American Acryl, a joint venture with Nippon Shokubai that produces acrylic monomers at Bayport, Texas, from wind power supplied by EDF Renewables North America. The year before, it and other companies at the Celanese site in Clear Lake, Texas, began taking about one thirds of its needs from solar power. The company produces acrylic acid and acrylic esters units there.

Finally, Sasol and Air Liquide have concluded three PPAs with Enel Green Power RSA for the long-term supply of 330 MW of renewable power to Sasol’s Secunda site in South Africa. This followed the signing of a third 110 MW PPA; the first two were announced in January 2023. It brings the total amount of renewable energy capacity the two firms have secured to about 690 MW, of which 430 MW have now achieved financial close.

The 330 MW wind facility, which is located close to Oyster Bay in the Eastern Cape, will be one of the largest wind-powered facilities in Southern Africa and will supply more than 1,100 GWh/year of clean energy when they come onstream in 2026.