Vattenfall and Evonik Sign Green Electricity Partnership

Energy supplier Vattenfall and specialty chemicals company Evonik have signed new long-term power supply contracts. Two Vattenfall solar parks in Schleswig-Holstein will supply Evonik with approximately 120 gigawatt hours of solar energy annually for chemical production starting in 2025. These ten-year contracts contain fixed terms ("Power Purchase Agreement", PPA) representing Evonik's deliberate commitment to increasing renewable electricity use. Martijn Hagens, Executive Board Member and Head of Business Area Markets at Vattenfall, emphasized: "Germany is the fastest-growing market for renewable energies in Europe. Here we see diverse growth opportunities for the development and commercialization of our solar and onshore and offshore projects. As the project we have realized with Evonik exemplifies, partnerships between industry and power suppliers play a decisive role here." Thomas Wessel, Board Member responsible for Sustainability at Evonik, said: "Evonik has an ambitious sustainability strategy and we are implementing our defined targets reliably: In 2022, Evonik signed supply contracts for green electricity from wind energy. In 2024, we expect to sign our first major supply contracts for solar energy. This marks another milestone on our path to converting 100 percent of our third-party electricity to green energy by 2030." Specifically, the Power Purchase Agreements (PPA) provide for Vattenfall to supply electricity to Evonik from two solar parks in Schleswig-Holstein. One solar park is located in Silberstedt south of Flensburg, and details of the second site will be announced shortly. These facilities, with a combined peak capacity of 120 megawatts (MWp), are planned to be completed and connected to the grid in 2025. The electricity volume set at approximately 120 gigawatt hours (GWh) annually corresponds to the annual demand of approximately 35,000 households and displaces more than 50,000 tonnes of CO2 annually from Germany's electricity mix. Vattenfall and Evonik expect this cooperation to provide investment certainty, supply security with green electricity, and risk diversification for both parties. The existing agreements will be valid for 10 years. Thomas Wessel emphasized the importance of the contracts with Vattenfall: "We are procuring significantly more green electricity from third-party sources. Approximately 35 percent of Evonik's global third-party electricity already comes from renewable sources. Thanks to the new agreements with Vattenfall, this share exceeds the 50 percent threshold. Thus, we are making ourselves less dependent on fossil fuels." Hagens explained: "The power partnership we have established with Evonik represents a long-term objective we pursue at Vattenfall: making fossil-free life possible across all value chains. This includes our suppliers, partners, and customers." The power supply agreement includes partnership components such as the joint assumption of opportunities and risks in the operational management of the solar parks. Chemical production requires the most stable possible power source. At the same time, the forecasted and actual production of renewable energy sources typically differ. To manage this, Evonik has a balancing group management system to manage its own chemical parks and facilities. This enables Evonik to align electricity supply and demand. This active balancing group management also contributes to grid stability. Observers expect demand for power partnerships between producers and industrial companies to increase in the coming years. According to research by the German Energy Agency (Dena), the volume of PPAs in Germany could rise to 192 terawatt hours by 2030, which could meet a quarter of Germany's total electricity demand. Secure, competitive, and environmentally friendly energy supply plays a decisive role, at least for Germany's energy-intensive chemical industry. At the same time, the sector produces numerous products that make the idea of energy transition possible in the first place. Source