thyssenkrupp Steel has signed up for offshore wind power from RWE's Kaskasi wind farm to run its first direct reduction plant in Duisburg. The wind farm has been spinning since March 2023. thyssenkrupp's power does not start until 2026, and it is the third buyer to queue for a ten-year slice of the same turbines.
Key takeaways
- RWE Supply & Trading signed a 10-year power purchase agreement with thyssenkrupp Steel, announced on 19 February 2024, to supply 112 GWh of electricity a year from 2026, generated at RWE's Kaskasi offshore wind farm in the German North Sea.
- The Kaskasi electricity will supply thyssenkrupp Steel's first direct reduction plant at its Duisburg location, which uses electrically powered melters.
- Kaskasi is a 342 MW offshore wind farm with 38 turbines, located 35 km off Helgoland, owned, developed and operated by RWE, and operational since March 2023.
- Enerdatics records four 10-year PPAs on Kaskasi: Schwarz Group for about 250 GWh a year from 2028, DHL Group for about 104 GWh from 2026, thyssenkrupp for 112 GWh from 2026 and Evonik for 37.5 GWh from 2028, a combined 503.5 GWh a year once all four are running.
- Of 18 German offshore wind PPAs announced between January 2023 and June 2024 that disclose a term, ten run for 15 years and five for 10 years, and all five 10-year contracts were signed by RWE.
What is a direct reduction plant, and why does it need this much power?
A direct reduction plant strips oxygen from iron ore without the coke-fired blast furnace that conventional steelmaking relies on. The iron that comes out is then melted to make steel. In thyssenkrupp's Duisburg design, that melting happens in electrically powered melters rather than in a furnace burning fossil fuel.
That swap moves a large part of the plant's energy demand onto the power grid. The climate benefit of the new process depends on where that electricity comes from. A contract for offshore wind gives thyssenkrupp a named renewable source for a fixed share of its demand.
A power purchase agreement, or PPA, is a long-term contract to buy electricity from a specific source on terms agreed in advance. Here the source is Kaskasi, and the volume is 112 GWh a year for ten years, or about 1,120 GWh in total. Leap records no capacity figure for the contract, so the deal is defined by energy rather than by megawatts.
Why does supply start in 2026 when Kaskasi is already running?
Because RWE is selling Kaskasi's output in staggered blocks with different start dates. thyssenkrupp and DHL Group both begin in 2026. Schwarz Group, which signed first in April 2023, and Evonik, which signed last in February 2024, both begin in 2028.
That produces a step in Kaskasi's contracted volume. From 2026 the two early-start contracts cover about 216 GWh a year. From 2028 all four together cover about 503.5 GWh a year. The record does not say who buys Kaskasi's power before 2026, or how the uncontracted share is sold.
A later start date has a practical logic for a steelmaker. thyssenkrupp's contract is tied to a new plant rather than an existing load, so the power is needed when the plant runs, not before. For RWE, forward contracts of this kind turn an operating wind farm's future output into fixed revenue years ahead of delivery.
How does a ten-year contract compare with other German offshore wind deals?
It is the short end of the market. Most German offshore wind PPAs in the period ran for 15 years. EnBW signed 15-year contracts for He Dreiht with buyers including Bosch, Deutsche Bahn, Deutsche Telekom, Evonik and Stahl-Holding-Saar. Iberdrola signed 15-year contracts for Baltic Eagle with Holcim, Salzgitter, Stahl-Holding-Saar and Telefonica, and for Windanker with TMD Friction Services.
Steel buyers stand out in that list. Salzgitter took 114 MW from Baltic Eagle for 15 years. Stahl-Holding-Saar took 50 MW from Baltic Eagle and 50 MW from He Dreiht, both for 15 years. thyssenkrupp took a ten-year contract instead, the same term as every other Kaskasi contract RWE has signed.
One likely difference is the wind farm's age. He Dreiht and Baltic Eagle were projects still being built when their contracts were signed, and long contracts are commonly used to support construction finance. Kaskasi was already operating, so RWE had less reason to lock in 15 years and could keep more of its later output open.
Enerdatics' data shows how distinctive RWE's approach is. Across 24 German offshore wind PPAs announced between January 2023 and June 2024, 18 disclose a term. Ten run for 15 years, five for 10 years and three for six to seven years. All five 10-year contracts were signed by RWE: the four Kaskasi deals and a 320 MW contract for Nordsee Ost and Amrumbank West with a consortium of buyers. Only two of the 24 disclose a tariff, both for Butendiek.
What does the deal signal for German green steel?
That steelmakers have become a significant group of buyers of German offshore wind. Within the period, three steelmakers signed contracts across three wind farms and three sellers. thyssenkrupp's Kaskasi deal ties the power to a named plant and a named process.
It also shows that a ten-year contract on an operating wind farm is a different product from a 15-year contract on a new one. The first offers earlier certainty about the asset; the second offers longer price protection. Buyers who cannot wait for a new wind farm to be built can take the first. RWE has now done so four times on Kaskasi.
The open question for thyssenkrupp is what happens in the mid-2030s, when this contract ends and the Duisburg plant, if it runs as planned, will still need power. Other German steelmakers such as Salzgitter have spread their buying across many contracts and technologies. One Kaskasi contract is a start, not a full supply plan.
Frequently asked questions
How much power will thyssenkrupp Steel buy from RWE's Kaskasi wind farm? About 112 GWh a year for ten years from 2026, supplied by RWE Supply & Trading to thyssenkrupp's first direct reduction plant in Duisburg.
How many companies buy power from Kaskasi? Enerdatics records four 10-year contracts on Kaskasi, with Schwarz Group, DHL Group, thyssenkrupp and Evonik, covering about 503.5 GWh a year once all four are running from 2028.
Where is the Kaskasi offshore wind farm? In the German North Sea, 35 km off Helgoland. It has 38 turbines and 342 MW of capacity, and has been operational since March 2023.
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