Mercedes has announced a new wind power deal to ensure it reaches carbon neutrality as soon as possible.
Countless automotive industry giants have become involved in the renewable energy sector, with varying levels of involvement. Still, one of the most involved has been Mercedes, which has invested heavily in massive wind and solar projects to power its European operations. Now, the business has secured another source of that energy from power company Iberdrola, which will be delivering up to 140MW of power from a Baltic Sea wind power site, coming online in 2026.
Mercedes will begin to receive power from the Iberdrola Baltic wind project starting in 2027. They will likely be one, if not the largest, customer of the power project, seeing as the system is projected to produce only just over double what Mercedes is getting, 300MW.
While the total transaction amount has not been revealed by Mercedes or Iberdrola, it is expected to be a multi-hundred million euro deal, providing the automaker with energy at a discount. At the same time, Iberdrola would receive a dependable income from its sizable wind project.
This investment, set to save the automaker millions, comes at a time of incredibly high cost across the entire automotive industry. The process of factory retrofitting, combined with the process of EV development investments, has proved to be some of the most expensive undertakings automakers are currently undertaking. Perhaps nowhere has this better been seen than at Ford, which now anticipates a $3 billion loss within its EV business alone, thanks to these incredibly high upfront costs.
This is not the first wind project Mercedes has invested in, nor is it the only renewables deal the automaker has inked. Previously, the premium German automaker invested in a sizable wind project in Central Germany and has also invested in numerous solar projects in the South of the country. Mercedes previously aimed to receive 70% of its energy used for car production from renewable sources by 2030 but has recently revised that estimate upwards to 80%, thanks to its success in its power investments.
Mercedes has stated that thanks to the Baltic wind project and numerous other renewable investments, half of all its operations in Europe will be powered by clean energy by 2025.
Outside of energy generation, much like many other automakers, Mercedes is investing in energy storage technologies, including both battery storage systems and hydrogen storage capabilities, which will likely both serve to help ensure baseload energy is consistently supplied to the power-hungry industrial giant.
The funding provided by countless European automakers for the generation of renewable energy has been a primary reason Europe has become a leader in the use of the greener energy transition, with the most recent estimate being that roughly 22% of Europe is now powered by such projects. However, this progress has been stunted by the Russian invasion of Ukraine and the dramatic increase in production costs in recent months.
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