In November 2023 EnBW signed Deutsche Telekom as a buyer for power from He Dreiht, its 960 MW offshore wind farm in the German North Sea. On its own, a 100 MW contract is not unusual. What made it notable was the running total: with Telekom on board, EnBW had sold about 45 percent of the project's output to corporate buyers before construction had even started.
Key takeaways
- EnBW signed a 15-year power purchase agreement on 3 November 2023 with PASM, a subsidiary of Deutsche Telekom, for 100 MW of offshore wind power from the 960 MW He Dreiht wind farm in Germany.
- With the Deutsche Telekom agreement, EnBW had signed 435 MW of PPAs for He Dreiht, equal to about 45 percent of the wind farm's total output, according to Leap.
- Before Deutsche Telekom, EnBW had signed He Dreiht PPAs with Fraport, Evonik (twice), Salzgitter, Robert Bosch and Deutsche Bahn between December 2021 and August 2023, and it added Stahl-Holding-Saar in April 2024.
- He Dreiht lies about 90 km northwest of Borkum, was won by EnBW in Germany's first offshore wind tender in 2017, and was set to be the first wind farm to use 15 MW turbines, with construction expected to start in May 2024.
- Allianz Capital Partners, Norges Bank Investment Management and AIP Management agreed in March 2023 to buy a 49.9 percent stake in He Dreiht from EnBW, in a deal Leap values at $1.393 billion.
Why sell offshore wind power one corporate contract at a time?
Because no single buyer wants 960 MW. A power purchase agreement, or PPA, is a long-term contract in which a company agrees to buy a set amount of a project's electricity at agreed terms. Large German industrials and service companies buy power in blocks of tens of megawatts, not hundreds. To contract a large share of a gigawatt-scale wind farm, a developer has to sign many of them.
The contracts also do a job beyond selling power. Offshore wind farms are financed largely with debt, and lenders size that debt on revenue they can predict. Each signed PPA converts part of the output from an uncertain market price into a known contract, which makes the project easier to finance and more valuable to equity investors.
EnBW built the book steadily over two years. Fraport signed first, in December 2021. Evonik followed in November 2022, with Salzgitter the same month. Evonik signed again in February 2023, Robert Bosch in March and Deutsche Bahn in August. Deutsche Telekom came in November 2023, and Stahl-Holding-Saar, a steel group, added a 50 MW agreement in April 2024. Telekom's 100 MW is one of the two largest single contracts on the project.
Who buys offshore wind power in Germany, and why 15 years?
Mostly heavy industry, alongside service and technology companies. He Dreiht's buyers show the mix: a chemicals group, two steelmakers, an engineering firm, an airport operator, a railway and a telecoms group. Several of them, the steelmakers and the chemicals group above all, consume large volumes of power around the clock.
Every He Dreiht contract recorded in Leap runs for 15 years. That is at the long end for German offshore PPAs, where terms of ten years or less are also common. It suits the project. A 15-year contract covers a large part of the period over which the debt is repaid, which is the point of signing it.
Telekom signed through PASM, a Deutsche Telekom subsidiary, rather than through the parent company. Buying through a group entity lets one team sign and manage power contracts on behalf of a business with many sites.
Enerdatics' data shows how far He Dreiht leads the German offshore market on contracting. Enerdatics records 35 corporate and utility PPAs from German offshore wind farms announced between 2021 and 2024. Eight of them are for He Dreiht, more than for any other project. Of the 26 with a disclosed term, 15 run for 15 years, including every He Dreiht contract. RWE's Kaskasi contracts with Schwarz Group, DHL, thyssenkrupp and Evonik run for ten years, and the Bard offshore contracts for six and seven. Only two of the 35 disclose a tariff, so price comparisons across the market are not possible from public records.
How does the contracting connect to the stake sale and the debt?
Directly. In March 2023, the same month Bosch signed, EnBW agreed to sell 49.9 percent of He Dreiht to a consortium of Allianz Capital Partners, Norges Bank Investment Management and AIP Management. Allianz was set to hold 16.6 percent of the wind farm. Leap values that stake sale at $1.393 billion, about $2.91 million per MW once grossed up to the whole project.
The lenders came in around the same time. The European Investment Bank proposed $1,162 million of financing for the project in January 2023, and in June 2023 EnBW secured a $546.2 million loan from LBBW, KfW IPEX-Bank and Commerzbank. Each new PPA strengthened the revenue case that sat behind both the equity sale and the debt.
A development-stage price of $2.91 million per MW sits well below operating German offshore assets. Enerdatics' analysis of Glennmont's purchase of half of Gode Wind 3 sets out how build stage and revenue support shape those prices.
What does the deal signal for German offshore wind?
It signals that corporate PPAs have become a central route to market for new German offshore wind. Developers of new German offshore wind farms are finding buyers contract by contract before construction, and using those contracts to raise equity and debt on better terms.
He Dreiht is the clearest example of that model at scale. Iberdrola followed a similar approach on Baltic Eagle, contracting Salzgitter, Holcim, Stahl-Holding-Saar and Amazon, as covered in Enerdatics' analysis of the valuation behind Masdar's Baltic Eagle stake. Several buyers, Salzgitter and Stahl-Holding-Saar among them, now hold contracts on more than one project.
The remaining question is how far the model can stretch. With about 45 percent of He Dreiht's output contracted after two years of work, EnBW still had more than half of a 960 MW wind farm to sell.
Frequently asked questions
How much He Dreiht power did Deutsche Telekom buy? Deutsche Telekom, through its subsidiary PASM, signed a 15-year PPA with EnBW for 100 MW of offshore wind power from He Dreiht. The agreement was announced on 3 November 2023.
How much of He Dreiht's output is under PPAs? With the Deutsche Telekom agreement, EnBW had signed 435 MW of PPAs for He Dreiht, about 45 percent of the wind farm's total output. EnBW added a further agreement with Stahl-Holding-Saar in April 2024.
Who owns He Dreiht? EnBW developed He Dreiht after winning it in Germany's first offshore tender in 2017. In March 2023 Allianz Capital Partners, Norges Bank Investment Management and AIP Management agreed to buy a 49.9 percent stake, with Allianz taking 16.6 percent.
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