Nucor has signed its second Virtual Power Purchase Agreement with another Texas energy provider. The 10-year VPPA with Ørsted Onshore North America, LLC, for 100 megawatts from Ørsted’s Western Trail wind farm adds to Nucor’s commitment to clean, renewable energy, the company said.
In November, Nucor signed a VPPA with EDFR Renewables North America as the sole off-taker for EDFR’s 250-megawatt Brazos Fork solar project. Together, the two projects have the potential to supply renewable power to the regional electric grid 24 hours a day.
“As an electric-arc furnace (EAF) steelmaker and North America’s largest recycler, Nucor is already among the cleanest and most sustainable steel producers in the world. This agreement will enable us to further reduce our climate footprint beyond our operations,” said Leon Topalian, president and CEO of Nucor. “Supporting the growth of renewable power generation is not only fundamental to who we are as a company, it also allows us to continue to lead the way forward for the global steel industry.”
Ørsted’s wind project is under construction in North Texas, incorporating Nucor steel, and is expected to be in service later this year. The wind turbines are designed to continue generating power even during severe weather, which will help mitigate power outages like those seen during the recent deep freeze across Texas, the energy company said.
What is a Virtual Power Purchase Agreement?
A VPPA is a financial contract in which a company agrees to purchase a project’s renewable energy for a pre-agreed price. When the energy is sold, the project receives the current market price; if it is higher than the fixed VPPA, the buyer receives the difference, and if lower, the buyer pays the difference to the project. The VPPA acts as a hedge against volatile energy prices for the purchaser and supports the development of new renewable energy resources by the utility company.
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