The revenue certainty offered by long-term power purchase agreements (PPAs) is essential to the financing of offshore wind (OSW). To date in the US state-mandated renewable energy procurements have been relied upon to award these long-term PPAs. As BOEM moves forward with lease sales in the Gulf of Mexico (GoM) corporate PPAs are a potential offtake opportunity. In the GoM there’s little history of state-mandated renewable energy procurements. However, corporate PPAs have been a major enabler of renewable energy development in ERCOT and SPP, supporting the development of over 20 GW in the Americas in 2021 according to BNEF. Corporate PPAs have supported OSW development in Europe given higher wholesale electricity market prices and a mature OSW sector. One challenge in the US is corporate PPA pricing has been well below OSW LCOEs. However, OSW does offer a number of benefits: (1) location near load centers reducing transmission costs and basis risk; (2) a generation profile that compliments solar; and (3) the ability to generate large volumes of clean energy at high capacity factors that can be used for green hydrogen.'
