As part of the largest-ever renewable energy purchase by the automotive industry, E.ON recently announced that it has signed an agreement with Honda for offtake from E.ON’s Boiling Springs Wind Farm. Under the terms of the Virtual Power Purchase Agreement (VPPA), Honda has contracted for 120 megawatts (MW) of the power and renewable attributes from the 150 MW Boiling Springs Wind Farm, E.ON’s first wind farm in the state of Oklahoma and in the Southwest Power Pool.
The agreement between E.ON and Honda features an collar structure, which sets upper and lower bounds on Honda’s exposure to energy market price fluctuations in any given quarter, while ensuring strong and stable revenue for E.ON as the project owner and operator. The collar format also positions E.ON to effectively manage the energy risk around the collar, maximizing each counter-party’s ability to achieve its goal in the contract. The deal with E.ON is part of a larger VPPA Honda signed for a combined 320 MW of wind and solar energy, the largest-ever renewable energy purchase by the auto industry.
The Boiling Springs Wind Farm is E.ON’s first project in Oklahoma and in the Southwest Power Pool. The 150 MW project will begin onsite construction in early 2020 and be completed by the end of the year, and is part of more than 1 gigawatt of renewable wind and solar energy projects E.ON will deliver to the grid by the end of 2020.