Good Energy inks largest offshore wind PPA with Ørsted

Good Energy and Ørsted announce 400GWh offshore wind agreement

Good Energy has signed a two-year Power Purchase Agreement with Ørsted for 400GWh of offshore wind electricity. The deal represents the renewable energy supplier’s largest clean power contract to date. It will deliver 200GWh annually from 2026, enough to supply approximately 74,000 UK homes each year.

This agreement marks an 80% increase in annual volume compared to Good Energy’s previous Ørsted contract. The earlier deal secured 110GWh per year from Hornsea 1 until 2025. The new PPA reflects growing demand for large-scale renewable offtake agreements as businesses seek stable, clean electricity supplies.

Ørsted operates several major offshore wind farms in UK waters. The company has built a strong track record in corporate Power Purchase Agreements, including Europe’s largest deal with Amazon and significant contracts with industrial buyers. Good Energy, meanwhile, has maintained its commitment to supplying 100% renewable electricity to customers since its foundation over 20 years ago.

Previous agreements between Good Energy and Ørsted

The two companies have worked together on multiple offshore wind projects. In March 2020, Good Energy signed a three-year deal worth up to £50 million for 12% of output from Westermost Rough Wind Farm. That 210MW site provided enough electricity for 33,000 homes annually.

By 2023, Good Energy expanded its relationship with Ørsted through the Hornsea 1 agreement. Hornsea 1, located off the Yorkshire coast, was the world’s largest operational offshore wind farm at the time of that deal. The contract secured 110GWh annually, covering the electricity needs of nearly 38,000 homes.

The new 2026 PPA builds on this foundation. Moving from 110GWh to 200GWh per year demonstrates both companies’ confidence in the UK offshore wind market. For Good Energy, the increased volume supports customer growth while maintaining its renewable supply guarantee. For Ørsted, the deal provides revenue certainty for a substantial portion of its UK wind generation.

Offshore wind’s growing role in UK electricity supply

Renewable energy now accounts for 47% of UK electricity generation, a record high. Wind power contributes 29.4% of total supply, with offshore wind representing the largest share of new capacity. This shift reflects government policy, improved technology, and falling costs across the sector.

Fixed-price renewable contracts have become increasingly attractive to energy suppliers. They provide price stability in volatile markets and help companies meet sustainability commitments. For businesses with net zero targets and carbon reporting requirements, securing renewable electricity through PPAs offers both cost certainty and credible emission reductions.

The UK government has set ambitious targets for offshore wind expansion. Current policy aims for 50GW of offshore wind capacity by 2030, up from around 14GW today. This expansion requires continued investment in generation assets and long-term offtake agreements like the Good Energy-Ørsted deal.

How Power Purchase Agreements work in practice

A Power Purchase Agreement is a contract between an electricity generator and a buyer. The buyer agrees to purchase a specific volume of electricity at a predetermined price over a set period. PPAs provide generators with revenue certainty, making it easier to finance new projects. Buyers gain price stability and access to renewable electricity they can count toward sustainability targets.

Corporate PPAs have grown significantly in recent years. Large energy users, from manufacturers to retailers, increasingly sign direct agreements with wind and solar developers. These contracts bypass wholesale markets, creating direct relationships between generators and end users.

For energy suppliers like Good Energy, PPAs form the backbone of their renewable electricity supply. Rather than purchasing power on spot markets, they secure fixed volumes from specific renewable sources. This allows them to guarantee customers receive genuinely green electricity while managing price risk.

The structure typically includes volume commitments, pricing mechanisms, and delivery schedules. Contracts range from a few years to several decades. The Good Energy-Ørsted agreement covers two years, providing medium-term certainty for both parties while allowing flexibility to renegotiate terms as market conditions change.

Commercial implications for UK businesses

This deal signals continued confidence in fixed-price renewable contracts despite recent energy market volatility. Businesses considering their electricity procurement options should note several key points.

First, long-term renewable PPAs can provide cost stability. While wholesale electricity prices have fluctuated dramatically since 2021, fixed-price agreements shield buyers from market spikes. For businesses with tight margins or predictable energy needs, this certainty has clear value.

Second, direct renewable procurement supports credible carbon reporting. Companies reporting emissions under schemes like the Streamlined Energy and Carbon Reporting framework can use renewable PPAs to demonstrate genuine emission reductions. This matters increasingly for public sector tenders and supply chain requirements.

Third, the scale of these agreements has implications for smaller businesses. While 200GWh per year suits a company of Good Energy’s size, the growth of the corporate PPA market creates opportunities for businesses of all sizes. Aggregated procurement models and power purchase options tailored for SMEs are becoming more common.

For companies in energy-intensive sectors, renewable electricity procurement increasingly affects competitiveness. Manufacturing, logistics, and data centre operators face growing pressure from customers and investors to decarbonise. Securing renewable power at stable prices addresses both cost and sustainability requirements.

Essential facts about the Good Energy and Ørsted agreement

• The Power Purchase Agreement covers 400GWh of offshore wind electricity over two years, delivering 200GWh annually from 2026.
• This volume can power approximately 74,000 UK homes per year, representing Good Energy’s largest renewable electricity contract to date.
• The deal marks an 80% increase in annual volume compared to Good Energy’s previous Ørsted agreement, which supplied 110GWh per year from Hornsea 1 until 2025.
• Good Energy previously signed a three-year contract in March 2020 for 12% of Westermost Rough Wind Farm’s output, worth up to £50 million.
• Renewable energy now accounts for 47% of UK electricity supply, with wind contributing 29.4% of total generation.
• The agreement supports Good Energy’s commitment to supplying 100% renewable electricity while providing Ørsted with revenue certainty for a portion of its UK offshore wind output.

What businesses should consider about renewable electricity procurement

Companies reviewing their energy strategy should examine several factors. The growth of corporate PPAs and renewable electricity options creates both opportunities and complexity.

Understanding your energy profile comes first. Businesses with consistent, predictable consumption may benefit from fixed-volume agreements. Those with variable demand might prefer flexible contracts or wholesale market exposure. The right approach depends on your specific circumstances.

Compliance requirements increasingly drive procurement decisions. Public sector suppliers face carbon reduction plan requirements under PPN 06/21. Private sector companies may face supply chain questionnaires asking for carbon data and renewable energy usage. Demonstrating credible renewable procurement can open doors to contracts and partnerships.

Price versus certainty trade-offs matter significantly. Fixed-price renewable contracts provide stability but may cost more than wholesale market rates in some periods. However, recent market volatility has demonstrated the value of price certainty. Businesses must weigh their risk appetite against budget constraints.

Scale affects your options considerably. Large energy users can negotiate direct PPAs with generators. Smaller businesses typically access renewable electricity through supplier tariffs or aggregated purchasing schemes. Understanding which mechanisms suit your consumption level helps identify realistic options.

The source and certification of renewable electricity deserves attention. Some green tariffs simply purchase Renewable Energy Guarantees of Origin certificates without direct renewable procurement. Others, like Good Energy’s model, involve direct contracts with generators. For robust carbon reporting and ESG compliance, understanding these distinctions matters.

Timing considerations also play a role. The UK offshore wind market continues expanding, but capacity constraints exist. Companies serious about renewable procurement should explore options well before current contracts expire. Lead times for bespoke arrangements can extend to several months.

Additional information on renewable electricity and Power Purchase Agreements

The Department for Energy Security and Net Zero publishes regular updates on UK renewable energy capacity and generation statistics. These reports provide context for understanding the renewable electricity market.

Ofgem, the energy regulator, maintains guidance on Renewable Energy Guarantees of Origin and how renewable electricity certification works in the UK. This helps businesses understand what different green electricity claims mean in practice.

For companies examining their carbon footprint and reduction options, the government’s conversion factors for company reporting include specific factors for different electricity sources. These allow accurate emissions calculations based on procurement choices.

Industry body REA (Association for Renewable Energy and Clean Technology) provides market intelligence and policy updates relevant to renewable electricity procurement. Their resources help businesses stay informed about market developments and policy changes affecting renewable energy.