Honda signed what it claims is the auto industry’s largest package of renewable power deals with an agreement to take output from 320MW of US wind and solar.
The agreements involving 120MW of wind and 200MW of PV will between them cover 1,000GWh of power annually for its US facilities and meet 60% of its North American needs, said the Japanese group.
The deal is structured as a ‘virtual power purchase agreement’ (VPPA), which allows corporate renewable buyers to commit to green energy without taking physical delivery of the electricity, but are instead based on renewable energy certificates.
Industry commentators told Recharge VPPAs are an increasingly attractive option for corporate buyers, as they offer flexibility and the chance to implement hedging mechanisms against power price fluctuations.
The wind element of the Honda deal relates to E.ON’s Boiling Springs Wind Farm in Oklahoma from 2020, with the solar coming from an unidentified Texas PV facility a year later.
Corporations are set to sign a record level of clean energy power contracts in 2019 after year-on-year growth in a first half dominated by US deals, said BloombergNEF.
Global corporate renewable PPAs totaled 8.6GW in the January-June period, up from 7.2GW at the same stage in 2018, said the research group’s latest market outlook. That leaves 2019 on course to outstrip the record 13.4GW notched up last year, it said.