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Statkraft inks power supply deal with Mercedes-Benz for German wind farms

Car maker Mercedes Benz has signed a deal with Norwegian power company Statkraft ASto buy electricity from six wind farms in Germany that will see their public subsidies run out in the coming years.

The power purchase agreement covers six community-owned wind farms with an installed capacity of 46 MW and generation of approximately 74 GWh per year, located in the German state of Lower Saxony. Mercedes-Benz, a division of Daimler AG, will buy 33.1 GWh of the plants' output in 2021, 74 GWh in 2022-2024 and 21.8 GWh in 2025, Statkraft said in a press release, without detailing the rates agreed by the two companies.

Since the wind farms will see their subsidies under Germany's renewable energy act expire by 2021, the deal will shield the assets from full exposure to power market prices, the company said.

"This agreement underlines our leading position in Europe in the direct supply of industrial customers with power from non-subsidised renewable assets," Carsten Poppinga, Statkraft's managing director in Germany, said.

Statkraft announced in September that it would purchase power from the plants over a period of three to five years after their funding expired. The wind farms were commissioned between 1999 and 2001, and subsidies last for 20 years.

Power supplied from the wind farms will be integrated into an existing supply contract with Enovos Energie Deutschland GmbH, which manages the accounting, grid use and integration of renewable power into the energy portfolio of Mercedes-Benz plants.

Mercedes will use the electricity to produce its EQC electric car at its plant in Bremen, Germany, as well as for battery production locations such as Kamenz and Stuttgart-Untertürkheim, according to the press release. Mercedes-Benz Cars Operations aims to supply all of its eight vehicle and powertrain plants in Germany with CO2-neutral energy by 2022, said Markus Schäfer, a member of the divisional board of management at the company.

Statkraft estimates that around 6,000 wind energy facilities in Germany, with an installed capacity of 4.5 GW, will fall out of the country's subsidy scheme on Jan. 1, 2021. Around 1,600 additional ones, with approximately 2.5 GW capacity, could follow every year between 2022 and 2026, the company said.