The announcement this week by equity company DIF of the country’s first bankable and unsubsidised co-located power purchase agreement and optimisation agreement (hybrid PPA) has significantly boosted confidence in the UK’s solar-plus-storage industry.
The hybrid PPA, which is supported by software and advisory business Pexapark, covers a 55 MW solar farm near Leighton Buzzard with a 40 MW/80 MWh battery storage system, delivering sustainable energy and assured revenue across the solar and battery energy storage system (BESS) over a 10-year period. The solar farm and storage system will both benefit from the market’s first hybrid PPA, which will provide safe and bankable revenue streams.
This new agreement follows a surge in interest in co-location of solar-plus-storage projects in the United Kingdom, as solar investors look to batteries in order to maximise the value and flexibility of their assets in the post-subsidy market. In the last two years, 45% of all solar planning permissions submitted in the UK have been for hybrid systems that include storage.
This trend is mirrored in the broader European industry, where 64% of renewable energy enterprises are now looking to adopt or enhance the share of energy storage in their portfolios, according to Pexapark’s recent survey data.
PPAs have offered an essential revenue stream and hedging tool for renewable energy companies and offtakers wanting to trade in Europe’s post-subsidy markets during the last decade. However, given of their complicated operational consumption profiles and contracting structures, PPAs for co-located projects have proven challenging to agree on. As a result, the choices for financing solar hybrid pipelines have been restricted.
Pexapark emphasises that the DIF hybrid PPA provides a model for the wider market to adopt in order to attain scale amid the larger energy transformation throughout the UK and the EU by delivering safe and bankable revenue streams.
“We’d like to congratulate DIF on this PPA, which marks the first of its kind in the UK and Europe more widely. This agreement reflects our commitment to finding new PPA solutions for unsubsidised renewable energy developers and offtakers, with contracted revenues that offer attractive returns and low risk profiles for investors,” said Brian Knowles, Director of Storage and Facility, Pexapark.
“We anticipate that this deal will be the first of many, representing a turning point for the European sector in the deployment of bankable solar hybrid projects. In the long run, agreements like this will be essential for integrating high shares of intermittent renewable energy generation into the grid,” added Jack Rankin, PPA Transaction Advisory Regional Lead GB and Ireland.
Source: https://www.dif.eu/
