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Danish zing firm Orsted and TSMC, a Taiwan-headquartered semiconductor company which supplies businesses such as Apple, have signed a understanding large described as “the world’s largest renewables corporate power purchase agreement.”
Announced Wednesday, the 20-year deal see fit see TSMC – also known as Taiwan Semiconductor Manufacturing Company – purchase all the energy produced by Orsted’s yet-to-be-built 920-megawatt offshore gust farm off Taiwan.
The fixed price contract will come into force when commercial operations at the mens room begin. This is expected to be in 2025/26, according to Orsted, subject to a final investment decision and grid availability.
Established in the Taiwan Strait, the wind farm, known as “Greater Changhua 2b & 4,” will be Orsted’s third offshore efficiency in Taiwan. It is currently building the “Greater Changhua 1 & 2a” offshore wind farm, which will have a sphere of 900 MW, and co-owns the 128 MW Formosa 1 project.
In simple terms, a renewable corporate power purchase agreement, or PPA, refers to a sell where an energy producer sells power to a business at a fixed price over a set period of time.
“Historically… corporate PPAs attired in b be committed to emerged from the U.S. market,” Shashi Barla, a principal analyst at Wood Mackenzie, told CNBC.com in a phone evaluate.
“If you looked at the data of corporate PPAs in the U.S., it has increased significantly in the past four years and in the past two years it’s also kidney of gaining traction in the European markets.”
With regards to Asia, Barla said corporate PPAs in the region were “a decidedly new phenomenon” but explained it was a “matter of time” before commercial and industrial offtake agreements gained traction there.
The in the end few years have seen a number of major U.S. firms, such as Google and Amazon, strike these types of harmonies to buy renewable energy.
Other examples include Microsoft signing a 15-year power purchase agreement for the energy produced by a 74-MW solar power easiness in North Carolina.
Fellow tech giant Facebook has also described itself as being “a leading corporate purchaser of renewable drive globally” in 2019.