Statkraft signs ‘first-of-a-kind’ PPA with UK developer Luminous Energy

Generator enters agreement on solar plant which is also subject to a virtual corporate PPA and a fixed-price contract secured through the UK government’s Contracts for Difference auction mechanism.

Norwegian energy generator Statkraft has signed a solar power purchase agreement (PPA) with Luminous Energy in a deal that’s claimed to be a first for the United Kingdom.

The PPA covers Bracon Ash Solar Farm in Norfolk, England. Before the deal, Luminous Energy had already secured fixed power prices for the 28.5 MW solar plant through two separate avenues – a Contract for Difference (CfD) from the fifth CfD allocation round, as well as a virtual corporate PPA (CPPA) with Britsol Airport. Statkraft said combining these two types of financial instrument on a single solar farm was a first for the UK market.

Bracon Ash’s CfD allocation covers 6.69 MW of the plant’s capacity and cleared at a strike price of GBP 47 ($59) per MWh, for delivery in the 2027/28 financial year. The 10-year CPPA with Bristol Airport was announced in March 2024 and is claimed to cover “a significant proportion” of the airport’s energy needs. As part of the CPPA, Luminous Energy will provide Renewable Energy Guarantee of Origin certificates to the airport.

Statkraft said its ability to support complex pricing and settlement was key to securing its PPA with Luminous Energy. As well as providing balancing services, Statkraft’s PPA can accommodate different pricing for the two portions of the solar farm, according to the generator. Statkraft also argued the deal offers additional security by offering physical hedges prior to other Bracon Ash contracts coming online. A Statkraft representative told pv magazine that its PPA may commence at the same time as the PPA with Bristol airport, but the company could not say for certain. Both PPAs will come online ahead of the CfD delivery period.

The deal will also see Luminous Energy make use of Statkraft’s downregulation service. In response to a price trigger set by Luminous Energy, Statkraft will be able to curtail the project remotely in order to prevent Bracon Ash from generating during negative price periods and incurring unnecessary costs.

Luminous Energy’s latest PPA provides the solar farm with access to Statkraft’s virtual power plant (VPP) system. Bracon Ash marks the first occasion Luminous Energy has built and owned a solar development. Engineering, procurement and construction provider Belectric was awarded the contract to construct the solar plant. Work commenced in November 2023 and commissioning is scheduled for Summer 2024.

This post appeared first on PV Magazine.

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