Ørsted has struck a long-term deal to sell almost a third of the electricity produced by its Race Bank offshore wind project directly to Northumbrian Water, in what the Danish renewables giant has hailed as the first Power Purchase Agreement (PPA) of its kind in the UK.

The 10-year corporate PPA, announced today, marks the first direct supply deal between a business and a UK offshore wind farm. It will see Northumbrian Water source around 100MW of electricity each year directly from the wind farm, providing a customer for roughly 30 per cent of the site's overall expected output.

Currently under commissioning off the Norfolk coast, the wind farm is capable of generating up to 573MW of power from 91 Siemens Gamesa 6MW turbines, according to Ørsted.

The deal, which commences from the start of next month, is an expansion of an existing renewable electricity supply agreement between the two companies which started in April last year.

Ørsted explained it would also provide an "innovative balancing service" for the wind power output from the project so that the electricity can be delivered to Northumbrian Water under the existing supply agreement.

Alana Kühne, head of corporate PPAs at Ørsted, said the two firms shared "ambitions towards a greener future".

"For Ørsted, this agreement is an important step towards building long-term green partnerships with corporate power customers," she added.

Northumbrian Water supplies around 2.7 million customers in the North East of England with both water and sewerage services, as well as supplying another 1.8 million customers in the South East with water services under the trading name Essex & Suffolk Water.

Graham Southall, Northumbrian Water's group commercial director, said the PPA deal would drive down the water supplier's operating costs by offering a fixed price for electricity, while also increasing its renewable energy use.

"This PPA is not only a first of its kind in the UK; more importantly it aligns perfectly with our sustainability goals and our ambitions of creating a truly cohesive energy management strategy," he said. "The long-term stability this brings is fantastic for us, and great news for our customers and stakeholders, because it reduces operational costs without compromising our work."

In November, Ørsted approved a long-term plan to invest more than £23bn in green energy projects globally through to 2025, eyeing a goal to deliver more than 30GW of total renewables capacity by the end of the decade. The bulk of the investment programme - 75-85 per cent - will be focused on building new offshore wind farms.