Amazon unveils plan for new global string of renewable Power Purchase Agreements

Pictured: the East Anglia Wind Hub. Image: Iberdrola

The e-commerce giant has confirmed that it will enter into power purchase agreements (PPAs) with Iberdrola to procure 1.1TWh of electricity each year from two of its offshore wind farms in German waters – namely the 476MW Baltic Eagle project, due for completion in 2024, and the 300MW Windanker project, due for completion in 2026.

Amazon and Iberdrola have not yet revealed details of PPAs in the US and Asia-Pacific markets, but edie has reached out for any additional information.

Amazon is notably aiming to source 100% renewable electricity to power its global operations by 2025. It pulled the target forward from 2030 last year after confirming an 85% renewable energy mix for 2021.

Since 2020, when it overtook Google’s parent company Alphabet, Amazon has been the world’s largest corporate purchaser of renewable electricity. Amazon stated in January that it added 133 new renewable generation projects across 11 national markets in 2022.

The partnership between Iberdrola and Amazon is a two-way partnership; while Amazon will procure electricity from Iberdrola’s projects, Iberdrola will procure cloud services from Amazon Web Services (AWS).

Iberdrola’s executive chairman Ignacio Galan said: “The challenge of electrifying our energy system to increase our autonomy and reduce emissions requires partnerships between leaders like Iberdrola and Amazon. The agreement today, combining sun, wind, and cloud, will enable new renewable generation capacity around the world and accelerate the digital revolution in the energy sector.”

The news follows recent renewable PPA announcements from firms including Vodafone, Iceland Foods and H&M Group.

A boost for UK offshore

In addition to the Amazon partnership, Iberdrola’s has this week announced a new deal with Siemens Gamesa to supply wind turbines for its East Anglia Three project, through its ScottishPower arm.

The £1.3bn contract covers all 95 of the wind turbines needed for the 1.4GW wind project, which is due to come online in 2026. Construction of onshore infrastructure for East Anglia Three began last summer.

ScottishPower’s East Anglia Hub, once expanded with the third phase, will total 3GW.

ScottishPower’s chief executive Keith Anderson said:  “This is the highest value contract ever awarded by ScottishPower and it clearly demonstrates our drive and determination to decarbonise the UK.

“Our agreement with Siemens Gamesa is a massive step forward for East Anglia Three, a project that has been more than 13 years in the making. We are now finalising our other contractual commitments so we can all achieve the clean energy future we want – and need.”

The UK Government is aiming for the nation to host 50GW of offshore wind capacity, a target which was increased from 40GW through the Energy Security Strategy last April.

The Strategy may be updated later this week, with Ministers planning a swathe of announcements relating to green finance, energy security and climate-related governance.

At a briefing held ahead of the occasion by the Energy and Climate Intelligence Unit, experts spoke of the need for policies to “at least level the playing field” for investment in offshore wind with investment in oil and gas. At present, all electricity generators are subject to a temporary 45% windfall tax.

Tax relief for decarbonisation-related profits was reduced in January from 80% to 29%, while the rate continues to remain above 90% for oil and gas.

Energy UK’s chief executive Emma Pinchbeck and executive director of policy and engagement Ana Musat also spoke of how investors are seeking more clarity on grid upgrades, faster planning and permitting and a strong base of skilled workers before choosing offshore wind in the UK.

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