Pharmaceutical and biotechnology company Bayer and independent power producer Cat Creek Energy have inked a long-term renewable energy credit purchase agreement to fulfill Bayer’s renewable electricity needs.

The pact involves Cat Creek Energy building multiple renewable energy resources and storage facilities in Idaho, United States to generate 1.4 TWh of clean electricity annually.

Bayer aims to become climate neutral in its operations in 2030. A key strategy to achieving their reduction targets is to purchase 100% sustainable renewable electricity by 2030.

The power generated by the projects will be equivalent to the energy consumption of 150,000 households. The deal will enable Bayer to reduce annual emissions by 370,000 tons, comparable to the emissions of 270,000 mid-sized cars, or the amount that 31.7 million trees can bind annually.

The projects will continue the state’s conversion to clean, reliable energy by 2045. For rural communities, the result will be over $1.5 billion in new electrical infrastructure, creating hundreds of jobs and contributing millions of dollars in year-over-year tax revenues for counties where the project will be built.

Construction will commence in the third quarter of this year.

“The innovative agreement with Cat Creek Energy marks one of the biggest single renewable energy deals in the United States. It will secure 40% of Bayer’s global and 60% of Bayer’s U.S.-purchased electricity demand out of renewable sources while meeting Bayer’s ambitious quality criteria for renewable electricity,” said Werner Baumann, CEO of Bayer.

Cat Creek Energy is working on a large-volume, long-duration storage project with pumped storage hydro which will provide 160 MW of battery storage capacity and help support and improve the reliability of Idaho’s transmission grid.

Corporates in the U.S. installed nearly 19 GW of onsite and offsite solar capacity cumulatively till June 2022. This includes 25 leading U.S.-based companies like Meta, Amazon, and Walmart installing 14% of the overall capacity.

The passage of the Inflation Reduction Act is also one of the major contributing factors for this shift, as it will support both onsite and offsite solar markets. Solar Energy Industries Association had pointed that the Act is expected to boost the onsite market by 24% until 2027, while the offsite markets will likely grow by 51% over the next five years.