Statkraft, a leading renewable energy company, has signed a ten-year power purchase agreement (PPA) and optimization agreement with the international investor FP Lux Group, advised by re:cap global investors ag.
The agreement covers the Scurf Dyke Solar Farm and battery near Driffield, in the East Riding of Yorkshire, which has an installed capacity of 80.6 MW, making it one of the largest solar schemes in the UK.
As the Scurf Dyke Solar Farm was project financed, it was crucial to have a long-term offtake contract in place to ensure a clear route to market for power and REGOs (Renewable Energy Guarantees of Origin).
Statkraft, with its extensive experience in the UK project finance sector, provided the necessary documentation and processes familiar to banks, investors, and advisors. Additionally, Statkraft AS (S&P A rated) offered a Parent Company Guarantee, as requested, further strengthening the agreement.
BayWa r.e. acted as the EPC (Engineering, Procurement, and Construction) contractor, responsible for developing and constructing the project, while their Asset Operations division will assume long-term responsibility for the operations and maintenance of the site. Statkraft and BayWa r.e. have previously collaborated on PPAs in the UK and Spain.
Alongside the solar farm, FP Lux and BayWa r.e. are also constructing an 8 MW Battery Energy Storage System (BESS), which Statkraft will optimize. Statkraft’s expertise in BESS optimization and renewable PPAs in the UK positions the company well to provide comprehensive offtake solutions for both elements.
This latest PPA signed by Statkraft is for a project that has received a Contract for Difference (CfD) from Allocation Round 4 (AR4).
Similar to other PPAs in Statkraft’s UK portfolio, the generator can set a minimum strike price, which, if not achieved in the day-ahead power auction, would lead to the asset being down-regulated, allowing Statkraft to turn off the Scurf Dyke Solar Farm to avoid generating power during negative price periods.
Statkraft’s well-established Virtual Power Plant (VPP) system enables the company to effectively manage the risk associated with the revised CfD mechanism, which no longer provides a top-up for any output generated during negative price periods.
Statkraft’s VPP has been successfully utilized to manage the renewables PPA portfolio in Germany and other parts of Europe, as well as to optimize the flexible generation portfolio in the UK.
Statkraft’s UK Markets team has been a consistent player in the market for many years, having previously signed CfD PPAs for onshore and offshore wind projects from Allocation Rounds 1 and 3.
With the re-introduction of onshore wind and solar to the CfD auction process, Statkraft has been in contact with the majority of the successful parties to explain the different Route to Market services for power and REGOs, as well as risk management and potential project optimization.
“Following a competitive tendering process, Statkraft were selected as the offtaker for Scurf Dyke. Given the size of the project, the counterparties involved and the potential addition of a BESS, we were particularly excited to be involved. Because of the significant prior experience of the team, once selected we were able to progress the contracts smoothly and meet Scurf Dyke’s timescales,” said John Puddephatt, Statkraft’s PPA Origination Manager.
“We were keen to work with an offtaker that could offer a renewables PPA as well as route to market optimization services for BESS, and could meet our investors’ and funders’ requirements. Statkraft also offered competitive commercial terms, could demonstrate previous experience and could provide a PCG from their A rated parent company,” commented Thomas Seibel, CEO at re:cap Global Investors.
Source :Statkraft
