Iberdrola has become one of the biggest solar players in the UK, after acquiring 17 PV projects from Elgin Energy and Lightsource BP.
The projects – which are at the preconstruction phase – have a combined capacity of more than 800MW, with 519MW from Elgin Energy’s 12 projects. In additional to the solar site, Iberdrola’s UK subsidiary ScottishPower will also gain a 70MW co-located energy storage project from Elgin through the deal.
All the projects are expected to be operational by 2025, and require a total investment of approximately £500 million.
The acquisition will bring Iberdrola’s share of solar in the UK from 2% to 9%, and confirms the company’s commitment to renewables in the country, it stated.
Globally, Iberdrola had almost 3GW of installed PV as of September 2021, an increase of 89% on 2019. This included 4MW of operational sites in the UK, along with 31GW of projects under development in Spain, US, Mexico, UK, Portugal and Italy.
The company is planning to double its PV capacity to 6GW by the end of 2022, targeting 14GW by 2025.
“With the UK having built up a massive pipeline of large-scale solar projects over the past few years, the consolidation today in the market is dominated by pre-build flipping of consented sites,” said Solar Media’s head of market research Finlay Colville.
“The announcement in question from Iberdrola is aligned entirely with the clear mandate from global utilities and IPPs to establish multi-GW renewable portfolios over the next 5-10 years. This type of activity is happening in many countries globally and there will be many more deals like this in the future. Acquiring sites from Elgin and Lightsource BP is one of the lowest-risk routes into the market today, since these companies have been two of the most successful, professional and transparent entities involved in solar farm development in the UK over the past 10 years," said Colville.
In April 2021, ScottishPower submitted a planning application for up to 40MW of solar site, along with up to 50MW of battery storage and a 20MW electrolyser, as part of its continued build out of assets as a green integrated utility. In June, construction also began on the company’s solar farm at the Carland Cross hybrid wind, PV and energy storage site.
“Scottish Power itself has been an active participant in new solar development and construction in the UK in the past 12-18 months, mainly building on its track-record of wind farm ownership and operations,” added Colville.
"However, the investment now from parent Iberdrola moves Scottish Power’s credentials to an altogether different level, hugely accelerating the scale of new solar sites that could be added to its portfolio in the next 2-3 years.”
Elgin Energy’s sale of assets follows the developer selling its 14MW solar portfolio in the Republic Ireland to Greek industrial conglomerate Mytilineos. It has been particularly active over the past year, raising £25 million and targeting 5GW in November 2021, as well as signing a new financing deal with German bank Berenberg to accelerate utility-scale project deployment and completing a £4.35 million fundraise with Focus Capital Partners to support the development of a 210MW portfolio of UK solar projects earlier that year.
“We are delighted to have reached this significant milestone and partnered with Iberdrola / Scottish Power Renewables on this portfolio. We will continue to develop and deliver on our 5GW project pipeline across the UK, Ireland and Australia, working closely with landowners, local authorities and all related stakeholders,” said Ronan Kilduff, CEO of Elgin Energy.
Lightsource BP has similarly been expanding its portfolio of utility-scale assets dramatically in recent years, including unveiling proposals for a 350MW site in North Anglesey, Wales.
The company heralded the return of large-scale solar build-out in the UK solar market at the end of 2019, announcing that it would be pursuing a 1GW project pipeline. Throughout last year it continued to advance its portfolio in the UK, including gaining planning permission for a 50MW solar farm near Castle Eden in Durham.
Overall the UK’s utility-scale solar sector has grown substantially over the past year, driving the country’s solar pipeline up to a staggering 37GW, according to new research from Solar Media.