NextEnergy Capital subsidiary NextPower UK ESG (NPUK ESG) has signed one of the UK’s largest solar sleeved PPA to date, to offtake energy from a 75MW Welsh solar farm.
The sleeved PPA is a 20-year inflation-linked contracted revenue agreement that covers 90% of the electricity and any associated Renewable Energy Guarantees of Origin certificates (REGOs) generated by Llanwern Solar Farm.
The project, remains the largest solar farm constructed and energised in the UK to date, covering 260 acres, NextEnergy said.
The sleeved PPA is a four-way physical contract that involves NPUK ESG selling power to Anglian Water Services (AWS) with the involvement of both EDF in the UK, and SSE.
The agreement works through EDF taking the power generated by Llanwern, which is then balanced, firmed, and converted, changing the intermittent generation into baseload blocks of power which is then sleeved to AWS via their energy supplier, SSE.
This structure allows the renewable generated solar profile to then reliably match the energy profile that is required by AWS, helping them towards their decarbonisation targets, NextEnergy said.
NPUK ESG is a private UK solar fund that focuses on acquiring utility-scale solar and battery storage (BESS) assets at the ready-to-build stage, constructing them through energisation in order to build a large operating portfolio of solar and BESS assets.
Once the assets are operational, NPUK monetises the power generated through a contracted strategy enabling a high degree of predictability and visibility on the Fund’s cash yield.
During the holding period, the investment team will take a hands-on approach to risk mitigation and value creation, optimising the assets over the fund’s life before looking to exit the portfolio, NextEnergy said.
Since its launch in August 2022, NPUK has already been able to make two distribution payments to its investor base, which have been in excess of target, alongside reporting impressive Net Asset Value growth, it added.
Michael Bonte-Friedheim, NextEnergy Group chief executive and founder, said: “NextPower UK ESG is one of the UK’s leading private solar funds that is playing a crucial part in the UK’s transition to Net Zero, as well as increasing the UK’s energy security through independence.
“This 20-year sleeved PPA fits perfectly into NextPower UK ESG’s contracted revenue strategy and demonstrates the future growth opportunity that solar serves in providing long-term power generation to both utilities and corporates as they increasingly look towards renewable energy sources as part of their decarbonisation journey.”
David Riley, head of carbon neutrality at Anglian Water, added: “Anglian Water is committed to being a carbon neutral business to the benefit of customers and the environment across our region.
“This leading and innovative structure has enabled renewable energy to be consumed with a direct line of sight to the physical solar asset, made possible with the dedication and shared expertise from teams within NEC, EDF, SSE and Anglian Water.”