Ørsted & TSMC Sign World’s Largest Renewables Corporate Power Purchase Agreement
In a press release today on Ørsted’s Taiwanese website, Danish energy giant Ørsted and Taiwan-based TSMC announced an agreement of historic proportions.
I became a long investor in Ørsted just before it changed its name from Dong (which stood for Danish Oil and Natural Gas), because I found buried in its Danish website a statement about going all-in on renewables, and sure enough, a year later the company sold off all oil and gas activities, leaving only the letter “D” of any relevance in the name, so changing the name to Ørsted — after the Danish discoverer of electromagnetism Hans Christian Ørsted — only seemed appropriate. Since then the evaluation of the company has skyrocketed.
Yesterday I read in the local newspaper that Ørsted is very attentive to the future mix of wind and solar, and the company is not afraid to state that wind at some point in time will lose to solar, as I have said before. However, right now wind is big business, and I applaud Ørsted for embraceing the given opportunities.
The press release in full:
Today, Ørsted and Taiwan-based TSMC have signed a corporate power purchase agreement (CPPA). TSMC will offtake the full production from Ørsted’s 920MW Greater Changhua 2b & 4 offshore wind farm, making it the largest-ever contract of its kind within renewable energy. The 20-year fixed-price contract period starts once Greater Changhua 2b & 4 reaches commercial operations in 2025/2026, subject to grid availability and Ørsted’s final investment decision.
TSMC, the world’s largest semiconductor foundry, is also a world-leader in green manufacturing. With this CPPA, TSMC once again demonstrates its long-term commitment to environmental sustainability.
J.K. Lin, Senior Vice President of Information Technology and Materials Management & Risk Management at TSMC, says: “TSMC is happy for this opportunity to collaborate with Ørsted and not only expand the adoption of renewable energy, but also to work towards Taiwan’s energy transition to build world-class industrial environment. As a corporate citizen, TSMC is taking ‘green action’ to carry out our responsibility to environmental protection.”
Under the agreement with TSMC, the Greater Changhua 2b & 4 offshore wind farm will receive a price for power including T-RECs (Taiwan renewable energy certificate) during the 20-year contract period that is higher than the feed-in-tariff which was originally secured via the outcome of Taiwan’s first offshore wind auction in June 2018. This improves the project’s financial viability and helps Ørsted mature Greater Changhua 2b & 4 towards a final investment decision.
Martin Neubert, Executive Vice President and CEO of Ørsted Offshore, says: “We commend TSMC for their leadership in renewable energy sourcing and for taking tangible action to deliver on their ambitious greenhouse gas reduction targets. By sourcing renewable energy at an unprecedented scale, TSMC demonstrates strong support for the development of renewable energy. Signing the largest-ever corporate PPA with the world’s leading semiconductor company shows that Ørsted is a trusted renewable energy partner for corporates and governments.”
Matthias Bausenwein, President of Ørsted Asia-Pacific, says: “The agreement between Ørsted and TSMC signed today underlines Ørsted’s pioneering role in the development of renewable energy in the Asia Pacific. In Taiwan, we are already constructing the Greater Changhua 1 & 2a offshore wind farm. Combined with our Greater Changhua 2b & 4 project, which is now one step closer to a final investment decision, we are making offshore wind a cornerstone in Taiwan’s transition from fossil-based to renewable energy.”
The information provided in this announcement does not change Ørsted’s previous financial guidance for the financial year of 2020 or the announced expected investment level for 2020.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Latest CleanTechnica.TV Video
CleanTechnica uses affiliate links. See our policy here.
