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

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
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

April 8, 2021
The US Department of the Treasury has revealed how new renewable tax incentives will be paid for by a tax raid on the fossil fuel industry, eliminating subsidies for oil and gas companies.
March 31, 2021
Danish renewables developer European Energy is expanding its operations into the US market, announcing plans for a 300MW solar project in Texas.
March 23, 2021
Lightsource bp has been selected to build, own and operate seven solar arrays in Pennsylvania that will provide nearly half of the state government’s electricity.
March 22, 2021
A subsidiary of EDP Renewables has signed a build-transfer agreement with Northern Indiana Public Service Company (NIPSCO) for the development of a 200MWac solar park in the US state of Indiana.
PV Tech Premium
March 17, 2021
California’s path to a carbon-free electricity will require record-breaking solar deployment for the next 25 years. But as solar installs stay above track, what else is needed for California to reach its zero carbon goal? A new joint report has the answers.
March 15, 2021
The new episode of the Solar Media Podcast, sponsored by Honeywell, is now available stream, as we take a look at US Energy Secretary Jennifer Granholm’s in-tray and explain why solar module prices could be set for a short-term price increase.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
April 13, 2021
Solar Media Events
April 20, 2021
Upcoming Webinars
April 28, 2021
4:00 - 4:30 PM CET