RWE unruffled by Trump offshore wind threat as Big Tech stokes appetite for 'green electrons'

Soaring demand for the green electrons sought to power data centres is helping to dispel fears about the threat to offshore wind investments in the US posed by Republican candidate Donald Trump, an RWE executive signalled in an earnings call today (Wednesday).

Describing demand from data centres as a hot topic for the wind industry, RWE chief financial officer (CFO) Michael Müller said power purchase agreements (PPAs) with tech companies already account for about half of RWE's contracted capacity in the US .

"We, obviously, are also strongly engaging with tech companies around PPAs and actually we are about to communicate another PPA that we have just signed with a Big Tech company for over 400MW and at an attractive price," he said.

"So indeed, we do see strong interest for those companies in greening up their portfolio."

Trump’s tirades against offshore wind tend to be politically targeted and the latest was intended to inflict damage on the ambitions of New Jersey governor Phil Murphy (Democrat).

Murphy has championed offshore wind by setting a state target of 11GW by 2040 and directed hundreds of millions of dollars towards sector-related port and supply chain development.

The Republican Party candidate’s vow to "stop governor Murphy's 157 windmills" was interpreted as a reference to Shell-EDF's 1.5GW Atlantic Shores project.

Without commenting directly on the Trump comments, Müller was sanguine about headlines from the campaigns.

"We see continuing strong trends for green electrons on the PPA side. If you think about New York... if New York wants to decarbonise they essentially need to use offshore wind. So therefore we see the trend for offshore (wind) as unbroken... it stays intact," he stated.

"If you think about our New York portfolio, we have a lease there. And now we have the options to go into CfD auctions and develop the projects and we still see demand for this. But at the same time, we also have flexibility in developing the project and looking for different offtakes. It is something we will observe but there is nothing today where you'll see me being nervous," he said

Asked for further details on the new PPA for more than 400MW of capacity, Müller was reluctant to confirm or quantify green premiums, pointing to the confidentiality aspect of contracts with customers and the fact that prices depend where projects are located in the US.

"If you go into some of the East Coast states, especially in the north, the higher the prices get higher. So they they get pretty much sometimes even to the level you see in Europe even above that. If you go to some other areas where it's easier to build renewables, the price levels are lower.

"What it's fair to say there is demand for green molecules. And that is helping to achieve attractive returns in our renewable projects. In the end, I don't care too much about the absolute price of the PPA, I care about the economics of the specific project, and we have seen them meeting or exceeding our expectations."