Honda jets to car industry’s ‘largest’ clean energy buy with 320MW PPA duo

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
A Honda branch in Guildford, Surrey, UK. Source: Mike Mozart, Flickr

Japanese carmaker Honda has clinched the car industry’s supposedly “largest” renewable energy deal, signing a duo of virtual power purchase agreements (VPPAs) for 320MW of wind and solar to power its US operations.

The agreements, which cover 120MW of wind from an Oklahoma farm being developed by E.On and 200MW of solar from Texas, will offset 1.012 million MWh of fossil-fuel powered electricity currently generated by the carmaker annually.

Honda will purchase 482,000 MWh each year from an under-construction solar facility in Texas, starting in the autumn of 2021. The specifics of the project will be shared in 2020, according to Honda. The firm will start purchasing wind power from E.On next fall.

The car company hopes the deals will ensure that 80% of its electricity generation in the US is renewable – a leap from the 21% it currently sources from “extremely low” carbon and carbon-free sources.

VPPA designed to counter power price volatility

In order to mitigate financial risk, Honda has turned to an “innovative contract structure” for its wind VPPA. It sets upper and lower bounds for the firm’s exposure to energy market price fluctuations in any given quarter.

“We hope the addition of a “collar” to the Boiling Springs [wind] project will encourage other companies to consider VPPAs as a method to secure renewable power and reduce climate-altering carbon emissions,” said Ryan Harty, manager of connected and environmental business development at American Honda, in a statement.

In virtual power purchase agreements, off-takers pay a fixed price for the electricity that a power project produces and sells into the wholesale market. In return, the project transfers to the company renewable energy certificates (RECs) associated with that electricity – in other words, credits for the energy produced from the wind or solar project.

In Honda’s case, the RECs will go towards offsetting emissions from its Alabama, Ohio and Indiana operations.

US solar prospects amid PPA uptake and a changing policy landscape will take centre stage at Solar Media's Solar & Storage Finance USA, to be held in New York on 29-30 October 2019.

Read Next

May 18, 2022
Shoals Technologies has become the latest solar manufacturer to adjust its guidance for the year, blaming an “increasingly challenging environment” caused by the US AD/CVD investigation.
May 17, 2022
A bipartisan group of US governors have pressured the President Joe Biden and Gina Raimondo to expedite the anti-dumping circumvention investigation (AD/CVD).
May 16, 2022
JinkoSolar, Trina Solar and Hanwha Q CELLS are among eight PV manufacturers that have been selected by the US Department of Commerce (DOC) to provide further information on their operations as part of the agency’s ongoing tariff circumvention investigation.
May 16, 2022
Japanese energy firm Osaka Gas is to enter the US utility-scale solar market through a joint venture with project developer Oriden.
May 13, 2022
Investment management firm Axium Infrastructure has acquired Boston-based solar and energy storage developer BlueWave, its first acquisition of a renewables developer.
May 12, 2022
Energy investment platform CleanCapital has secured a US$200 million credit facility to support its pipeline of distributed solar and energy storage projects.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
June 7, 2022
Leonardo Royal London City, London, UK
Solar Media Events
June 14, 2022
Napa, USA
Solar Media Events
June 22, 2022
Sheraton Austin Hotel at the Capitol, Austin, Texas