Statkraft has entered into a power purchase agreement (PPA) with Luminous Energy for the Bracon Ash Solar Farm in Norfolk.
The solar farm will have a total installed capacity of 28.5 MW, capable of generating enough clean energy to power approximately 9,500 homes.
Securing Fixed Power Prices
Luminous Energy has successfully obtained fixed power prices for nearly all of the Bracon Ash Solar Farm’s output through two distinct mechanisms: a Contract for Difference (CfD) from CfD Allocation Round 5 and a virtual Corporate PPA with Bristol Airport.
This is believed to be one of the first projects to combine these two financial instruments for a single solar farm, guaranteeing a fixed income for a significant portion of its output. Statkraft’s flexibility and ability to accommodate complex pricing and settlement structures have been pivotal in securing this PPA.
Statkraft’s Comprehensive PPA Services
In addition to providing balancing services, Statkraft’s PPA offers different pricing structures for the two portions of the solar farm and provides additional security through physical hedges before the financial contracts begin.
This flexibility ensures greater price certainty and the potential to secure higher prices in the period immediately preceding the commencement of other contracts.
Downregulation Service for Optimal Revenue
Statkraft’s downregulation service is a valuable benefit for Luminous Energy under this PPA. By responding to a price trigger set by Luminous Energy and remotely curtailing the project, Statkraft can prevent Bracon Ash from generating electricity during periods of negative prices, avoiding unnecessary costs and alleviating pressure on the grid.
Statkraft can manage this risk for generators through its well-established Virtual Power Plant (VPP) system. This VPP has been effectively utilized for several years to manage Statkraft’s renewables PPA portfolio in Germany and other parts of Europe, as well as to optimize the flexible generation portfolio in the UK.
Extensive Experience in UK Markets
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 starting from AR1 in 2015 and AR3 in 2019. With the reintroduction of onshore wind and solar to the CfD auction process, numerous projects have been successful.
Statkraft has been proactive in communicating with the majority of successful parties to explain its diverse Route to Market services for power and Renewable Energy Guarantees of Origin (REGOs), as well as risk management and potential project optimization strategies.
Comments from Statkraft and Luminous Energy
Michelle Lam, Statkraft’s PPA Business Development Manager, emphasized the company’s commitment to innovation, stating, “Finding new solutions to maximize returns on behalf of our customers is in our DNA at Statkraft.”
Guy Lavarack, Chief Investment Officer at Luminous Energy, expressed satisfaction with the partnership, highlighting Statkraft’s market-leading position, VPP system, and ability to manage complex metering arrangements as key factors in their decision.