Salzgitter has signed a 15-year contract to buy power from Nordlicht 1, an offshore wind farm Vattenfall is developing in the German North Sea. The steelmaker is taking 75 MW. On a 980 MW project, that looks small. But Nordlicht's output is not one pool that any buyer can draw from, and Salzgitter's contract only makes sense once you know whose half it comes from.
Key takeaways
- Vattenfall signed a 15-year PPA with Salzgitter, announced on 29 August 2024, for 75 MW of the Nordlicht 1 offshore wind farm in Germany, with supply expected to begin in 2028.
- Under the Vattenfall agreement, Salzgitter will buy about 300 GWh of electricity a year from Nordlicht 1 for steel production.
- Nordlicht 1 is a 980 MW offshore wind farm of 68 turbines located 85 kilometres north of Borkum, owned 51 percent by Vattenfall and 49 percent by BASF and expected to connect to the grid in 2028.
- With Nordlicht 1, Salzgitter holds 15-year PPAs at three German offshore wind farms in Leap: 50 MW from He Dreiht, 114 MW from Baltic Eagle and 75 MW from Nordlicht 1, a total of 239 MW.
- Enerdatics records 27 German offshore wind PPAs announced in 2023 and 2024; 19 disclose a term, 11 of those are for 15 years, and only two disclose a price.
Whose share of Nordlicht is Salzgitter buying?
Vattenfall's. Nordlicht is a two-site project: Nordlicht 1 at 980 MW and Nordlicht 2 at 630 MW, 1.61 GW in all. In April 2024 Vattenfall signed the sale of 49 percent of both sites to BASF, and at the same time signed a PPA under which BASF takes its share of the output for its chemical sites, in particular Ludwigshafen. Leap records that contract at 796.95 MW.
That leaves Vattenfall's 51 percent. Vattenfall said it would use its share to supply its German customers, and Salzgitter is one of them. Measured against Vattenfall's half of Nordlicht 1, which is roughly 500 MW, Salzgitter's 75 MW is about 15 percent. It is not a sliver of a large wind farm. It is a meaningful slice of the part of the wind farm that is actually for sale.
The price of that ownership split is worth recalling. Enerdatics estimated that most of BASF's $533.85 million consideration went on lease payments to the transmission operator rather than on a developer premium, as set out in its analysis of how lease payments swallow two thirds of BASF's Nordlicht stake. BASF paid to own its electricity. Salzgitter is contracting for it instead.
Why does a steelmaker want offshore wind for 15 years?
Because the power goes straight into making steel. Leap records that Salzgitter will use the Nordlicht electricity for steel production, an industrial load that runs around the clock and does not shrink in winter. For a buyer like that, a 15-year supply agreed years in advance turns part of a large, recurring input cost into something it can plan around.
Offshore wind suits that kind of demand, and the contract's own numbers show why. At about 300 GWh a year from 75 MW, Salzgitter's share is expected to run at the equivalent of 4,000 full-power hours a year, a load factor of roughly 46 percent.
Nordlicht is not Salzgitter's first offshore contract. It signed with EnBW for 50 MW of He Dreiht in November 2022 and with Iberdrola for 114 MW of Baltic Eagle in April 2023, both for 15 years. At Baltic Eagle it is one of five buyers splitting Iberdrola's output. Alongside its offshore contracts, Salzgitter has signed onshore solar agreements, including the 122 MW Schiebsdorf deal with Octopus, which ranks among Salzgitter's renewable power contracts as one of the largest and, at ten years, one of the shorter terms.
What does a 15-year term say about the contract?
That it was written for a wind farm not yet built. Long terms are the norm for projects that need contracted revenue to reach a final investment decision. Leap records that a final investment decision on Nordlicht was expected in 2025, with construction from 2026 and full operation in 2028. Salzgitter's contract runs from 2028, so it was signed about three and a half years before the first delivery.
Enerdatics' data shows 27 offshore wind PPAs in Germany announced in 2023 and 2024. Nineteen disclose a term. Eleven of those are 15-year contracts, and all eleven are tied to four wind farms: He Dreiht, Baltic Eagle, Windanker and Nordlicht 1. The shorter contracts, mostly ten years, cluster around Kaskasi, Bard, Butendiek and the Nordsee Ost and Amrumbank West farms. Only two of the 27 disclose a price, both for Butendiek. Salzgitter's contract fits the pattern exactly: a 15-year term, a named project, and no price.
Vattenfall continued down the same path after Salzgitter. In January 2025 it signed a 15-year PPA with LyondellBasell for 117 MW of Nordlicht 1, about 450 GWh a year, also starting in 2028. Together the two contracts cover 192 MW, or close to two fifths of Vattenfall's share of Nordlicht 1. Both buyers are heavy industry. Both chose the same term.
What does the deal signal for German offshore wind?
It signals that German offshore wind is being financed in two layers. The first layer is ownership: an industrial partner such as BASF takes equity and the matching share of output. The second layer is contracts: the developer sells its remaining share to other industrial buyers on long terms. Nordlicht uses both, and the second layer is filling up well before the turbines are in the water.
It also signals who the buyers are. Steelmakers alone hold four of the eleven 15-year contracts Enerdatics records for 2023 and 2024: Salzgitter at Baltic Eagle and Nordlicht 1, and Stahl-Holding-Saar at Baltic Eagle and He Dreiht. Chemicals, building materials, rail and telecoms groups hold most of the rest. These are companies whose power demand is large and continuous. For them the attraction is a fixed supply over a long period, which is exactly what a new offshore wind farm needs to sell.
Finally, it shows how little of this market is priced in public. Two disclosed tariffs across 27 contracts is not enough to benchmark German offshore PPAs. What can be tracked is volume, term and the identity of the buyers. On those measures, Salzgitter is among the most committed corporate buyers of German offshore wind, with 239 MW across three farms.
Frequently asked questions
What did Salzgitter agree with Vattenfall? Salzgitter signed a 15-year PPA with Vattenfall, announced on 29 August 2024, to buy about 300 GWh a year from 75 MW of the Nordlicht 1 offshore wind farm, starting in 2028.
Who owns the Nordlicht 1 offshore wind farm? Vattenfall holds 51 percent of Nordlicht 1 and BASF holds 49 percent. BASF takes its share of the output through its own PPA, while Vattenfall sells its share to customers such as Salzgitter.
What other offshore wind contracts does Salzgitter have? Salzgitter also holds 15-year PPAs for 50 MW of EnBW's He Dreiht and 114 MW of Iberdrola's Baltic Eagle offshore wind farms in Germany.
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