Honda has entered into long-term virtual power purchase agreements (VPPAs) for renewable wind and solar power that will cover more than 60% of the electricity that Honda uses in North America.

"These VPPAs will enable Honda to fully offset the remaining carbon intensive grid-supplied electricity being used in its Ohio, Indiana, and Alabama automobile manufacturing operations," the company said

Starting in fall of 2020, Honda will purchase 530,000 MWh/year from 120 MW of wind power generated by the Boiling Springs Wind Farm in Oklahoma, a 150 MW development of the energy company E.ON.

Then in fall of 2021, Honda will secure an additional 482,000 MWh/year from 200 MW of solar power generated from a Texas solar facility. Additional details of the Texas solar facility will be disclosed in 2020 when it is nearer to completion, Honda said.

Honda's combined agreements for the output of 320 MW of renewable generation capacity will result in the purchase of 1.012 million MWh of electricity per year

"Honda will continue to purchase electricity from the local utility for each manufacturing facility, but will receive and retire renewable energy certificates (RECs) equal to the power produced through the VPPAs, resulting in net zero CO2e emissions from electricity use within Honda's Ohio, Indiana, and Alabama manufacturing operations," Honda said

"In the process of structuring the Boiling Springs Wind Farm VPPA, Honda implemented an innovative contract structure with the potential to mitigate financial risks in the VPPA market, further expanding the market for corporations like Honda where reduced exposure to energy price risk is desirable. This new 'collar' structure sets upper and lower bounds on Honda's exposure to energy market price fluctuations in any given quarter, while resulting in strong and stable revenues for the renewable power operators," Honda said

Tags:
Contract awards   E.ON  

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