Our Energy team has advised Statkraft on an innovative seven-year route-to-market power purchase agreement (PPA) with Luminous Energy, for the Bracon Ash Solar Farm in Norfolk. The solar farm will have an installed capacity of 28.5MW, generating enough clean energy to power the equivalent of 9,500 homes.
Luminous Energy has secured fixed power prices for almost all of Bracon Ash Solar Farm's output via two separate sources - a Contract for Difference (CfD) under the UK government's CfD Allocation Round 5; and a virtual corporate PPA with Bristol Airport. Bracon Ash is thought to be one of the first projects to combine these two income streams for a single solar farm, guaranteeing fixed income for much of its output.
Statkraft's flexibility and ability to support more complex pricing and settlement has been key to the success in signing the route-to-market PPA.
As well as providing balancing services, Statkraft's PPA accommodates different pricing for the two portions of the solar farm and provides the additional security of offering physical hedges prior to the financial contracts commencing. This optionality allows further price certainty and the potential to secure high prices in the period immediately before the financial contracts commence.
Statkraft's downregulation service provided as part of the PPA is also an important benefit to Luminous Energy. By responding to a price trigger set by Luminous Energy and curtailing the project remotely, Statkraft will prevent Bracon Ash from generating during negative price periods and incurring unnecessary costs whilst also relieving pressure on the grid. Statkraft can manage this risk for generators via its well-established Virtual Power Plant (VPP) system.
Gowling WLG has advised Statkraft on UK PPAs for more than a decade. The legal team advising Statkraft was led by Gus Wood (Partner), supported by George Nixon (Associate).