Japanese automobile manufacturer Honda has signed 320MW virtual power purchase agreements (VPPAs) for wind and solar capacity to power its North American manufacturing operations.

The company has signed VPPAs for German energy group E.on’s wind park in Oklahoma and an unnamed seller’s solar farm in Texas.

Honda signs VPPA for Boiling Springs wind farm

Under the terms of the agreement, Honda will procure 120MW electricity from E.ON’s 150MW Boiling Springs wind farm and an additional 200MW solar power generated from a Texas solar facility.

The VPPAs will enable the Tokyo-based company to receive 530,000MWh of wind power and 482,000MWh of solar energy annually.

The construction of the Boiling Springs wind project is expected to begin at the start of 2020 and will become operational by the end of the year.

The Boiling Springs wind farm is part of over 1GW of renewable wind and solar energy projects E.ON will deliver to the grid by the end of next year.

The VPPA features a collar structure which introduces upper and lower bounds on Honda’s exposure to quarterly fluctuations in energy market prices.

American Honda connected and environmental business development manager Ryan Harty said: “This VPPA will help Honda meet its CO2 reduction goals by adding clean renewable electricity and by de-carbonizing the electricity grid.

“We hope the addition of a ‘collar’ format in this deal will encourage other companies to consider VPPAs as a method to secure renewable power and reduce climate-altering carbon emissions.”

Currently, 21% of the electricity that the automobile manufacturer uses in North America is supplied from low and zero CO2 sources.

Eon chief operating officer North America Silvia Ortin said: “We are proud to work with Honda to provide 100% clean, renewable wind power from Boiling Springs wind farm for its North American manufacturing facilities.

“Eon’s dedication to a sustainable future is a great fit with Honda’s values and commitment to reducing its greenhouse gas impact.”

Once operational, the VPPAs will offset over 800,000 metric tonnes of carbon dioxide emissions annually, which is equivalent to 100,000 US homes worth of carbon dioxide emissions from household energy usage.