The car maker will buy 50% of the 139MW Bruzaholm wind farm's output under a ten-year contract starting in 2025.
Vattenfall is the sole owner and developer of the project, and aims to commission it in 2025.
Construction at Bruzaholm is expected to start later this year. The wind farm will be built using 21 Siemens Gamesa turbines near Eksjö in southern Sweden.
Volvo said the move was part of its ambition to decarbonise operations throughout its value chain.
“The agreement signals our commitment to prioritise low-carbon investments, source renewable energy, and take climate action across everything we do,” said Martin Lundstedt, president and CEO of Volvo Group.
A Volvo spokesperson told Windpower Monthly it was the company's first power purchase agreement for wind energy in Sweden with other agreements — including a PPA for wind energy produced by turbines near a Volvo plant in Ghent — already in place.
"In Sweden we source 100% renewable electricity with the biggest portion coming from hydro generated power and with this new agreement we will also purchase also wind power. In 2022, 48% of the total energy sourced by Volvo Group’s global operations (production, technology centers, warehouses, and dealership sites) was from renewable sources," the spokesperson said.
Sweden currently has an operational wind fleet of 14.7GW, according to Windpower Intelligence, the research and data division of Windpower Monthly. Vattenfall has helped to develop 9.17% of this capacity.