RWE and Eon enter new major deal

The two German utilities have signed a PPA for 3 TWh of renewable energy from wind turbines to the UK market.
Photo: Thilo Schmuelgen/Reuters/Ritzau Scanpix
Photo: Thilo Schmuelgen/Reuters/Ritzau Scanpix

Eon and RWE aren't quite done making deals with each other. The next transaction to follow the completion of the major asset swap pertains electricity from wind farms, which were also part of the preceding trade.

The two utilities have entered a power purchase agreement involving Eon buying around 3 TWh from RWE's UK wind farm. This entails the output from 892 MW in both onshore and offshore wind capacity and includes power from London Array.

Eon is thereby able to fulfill its promise that all of its private customers across the UK will be supplied by electricity sourced 100 percent from renewables – and without added cost.

There's a funny twist to this PPA, which has a term of 2.5 years: Eon actually built the wind farms from which it's now buying power. This came to be in connection with the company's investments in British RE worth a total of 3.3 billion spent over the last ten years.

The wind farms were part of the two utilities' transaction completed in October, which involved, among other things, green asset ownership being transferred from Eon to RWE. In return, Eon gained holdings including RWE's stake in Innogy.

"A significant element of our commitment to providing all our residential customers with renewable electricity – a change at a scale never seen before in Britain – was the fact we have invested more than GBP 3.3 billion in renewable energy in the UK in recent years," writes Eon UK Chief Executive Michael Lewis in a press statement.

"We have now secured the power coming from all those wind farms, as well as similar arrangements we have with more than a dozen independent generators around the country, which means our customers can continue to enjoy an electricity supply backed by UK renewables," he adds

Eon supplies electricity to roughly 3.3 million households in the UK.

RWE Renewables Chief Commercial Officer Tom Glover says the utility has more than 2,000 MW of green energy operating in Britain, which he calls a very attractive market.

"PPAs as are an extremely important instrument that help to achieve renewable build-out targets and offer stability for all parties involved," Glover writes.

RWE currently owns a combined capacity of more than 9 GW and has another 2.6 GW under development.

English Edit: Daniel Frank Christensen

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