Statkraft has signed a 10-year power purchase agreement (PPA) and optimisation agreement with international investor FP Lux Group for offtake from its 81MW Scurf Dyke solar farm in Yorkshire, England.
The developer of the array was advised by Re:cap global investors ag as an internationally active independent investment advisor.
As the 80.6MW Scurf Dyke Solar Farm was project financed, it was important to have a long-term offtake contract in place so that there was a clear route to market for power and Renewable Energy Guarantees of Origin (REGO)s, said Statkraft.
BayWa r.e. acted in an EPC role to develop and construct the project, while its Asset Operations division will assume responsibility for the operations and maintenance of the site on a long-term agreement.
The Norwegian developer and BayWa r.e. have previously agreed PPAs in the UK, on the 42MW Dalquhandy wind farm, and in Spain, on both the 41.7MW Tordesillas and 170MW Don Rodrigo solar projects.
FP Lux and BayWa r.e. are also constructing an 8MW BESS adjacent to the solar farm, which Statkraft will optimise.
This is the latest PPA Statkraft has signed for projects that have received a Contract for Difference (CfD) from Allocation Round 4 (AR4).
As with other PPAs in its UK portfolio, the generator is able to set a minimum strike price, which, if not achieved in the day-ahead power auction, would lead to the asset being down-regulated. This would mean Scurf Dyke can be turned off by Statkraft so it avoids generating power during negative price periods.
Any projects from AR4 will not receive a top up under the revised CfD mechanism, for any output generated during a negative price period. However, Statkraft can manage this risk for generators via its well-established Virtual Power Plant (VPP) system.
Statkraft’s VPP has been used effectively for a number of years to manage the renewables PPA portfolio in Germany and elsewhere in Europe, and to optimise the flexible generation portfolio in the UK.
Thje developer’s UK Markets team has been a consistent part of the market for many years, having previously signed CfD PPAs for onshore and offshore wind projects from AR1 in 2015, and AR3 in 2019.
Since onshore wind and solar were re-introduced to the CfD auction process, a large number of schemes have been successful. Statkraft has been in contact with the majority of the successful parties to explain the different Route to Market services for power and REGO that it offers, as well as risk management and potential project optimisation.
“Following a competitive tendering process, Statkraft were selected as the offtaker for Scurf Dyke,” said Statkraft’s PPA origination manager John Puddephatt.
“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.
“The signing of a PPA with a new customer is always a very positive moment, and I hope we’ll be able to build on this new relationship with Re:cap and optimise its renewable assets in both the UK and more widely.”
Re:cap Global Investors chief executive Thomas Seibel added: “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.”