Two UK-based independent energy companies have struck a long term deal for UK renewable generation projects worth £70 million.
London-based renewable investor, Low Carbon, has signed a 15 year Power Purchase Agreement (PPA) with energy purchaser and supplier, SmartestEnergy, covering a first phase of generating capacity of 65MW.
The first 23MW of capacity agreed under the PPA will be provided by four solar park developments in Dorset, Devon and the Isle of Wight. All of the projects were connected to the grid in March in time to claim the higher Renewable Obligation rate and are backed by Investec Bank.
Commenting on the deal, John Cole, chief investment officer of Low Carbon, said that the agreement provides a key foundation for further significant investment in UK renewables. He added: “Given the current uncertainty in the market, we are very pleased that SmartestEnergy stood behind its commitment to conclude a PPA with us and we look forward to doing more business with them.”
Iain Robertson, generation sales manager for SmartestEnergy, said: “Banks are looking for greater security and the fact we are able to provide such long term deals on both the power generated and the ROC payments is helping projects secure the finance they need to proceed.”
“We find there are a lot of entrepreneurial developers who are very good with the early stages of projects such as getting buy-in from communities but perhaps struggle with the funding. We are able to provide the legal and financial firepower needed to get projects backed and in the ground as quickly as possible,” explained Cole.
The construction of the remaining generating capacity will begin in the “near future”.