Renewable power generator Statkraft has signed a seven-year power purchase agreement (PPA) with Luminous Energy covering the latter’s 28.5MWp Bracon Ash Solar Farm in Norfolk.
Luminous Energy has secured fixed power prices for the majority of the solar farm’s output with a Contract for Difference (CfD) from allocation round 5 (AR5) and a virtual corporate PPA with Bristol Airport.
According to the developer, the Bracon Ash project is the first to combine these two financial instruments for one solar farm. Statkraft’s PPA provides balancing services and accommodates different pricing for the two portions of the solar farm.
It further provides additional security, offering physical hedges before the financial contracts begin; this optionality allows price certainty and the potential to score high prices in the period immediately before the other contracts start.
Statkraft will use its downregulation service to prevent Bracon Ash from generating during negative price periods, an important benefit for Luminous Energy. By responding to a price trigger set by Luminous Energy and curtailing the project remotely, Statkraft will help prevent unnecessary costs and relieve pressure on the grid.
Luminous Energy received financial close on the 28.5MWp solar farm in August 2023, at the time marking the renewable energy and battery storage developer’s transition to an independent power producer (IPP).
Guy Lavarack, chief investment officer from Luminous Energy, said: “We are delighted to sign a long-term power purchase agreement with Statkraft. Their market-leading position, virtual power plant system and ability to manage the complex metering arrangements convinced us they were the best counterparty to appoint for our first operational solar farm.”
Statkraft’s Virtual Power Plant (VPP) system already manages its renewables PPA portfolio in Germany and across Europe.
Michelle Lam, Statkraft’s PPA business development manager, said: “Finding new solutions to maximise the returns on behalf of our customers is in our DNA at Statkraft. That’s why it’s been particularly exciting to work with Luminous Energy on this unique PPA.
“Statkraft has once again proven its innovative approach and willingness to think creatively on behalf of our customers to meet their requirements and to optimise the options available in the market.”
Statkraft has been growing its solar and BESS ambitions in the UK with several other financial agreements, including a simultaneous Power Purchase Agreement (PPA) with Gresham House and a corporate Power Purchase Agreement (cPPA) with Workspace for the 20MW Beavor Grange Solar Farm in Devon.
Interestingly, the energy giant recently announced it will reduce its targets for building solar PV, battery energy storage systems (BESS) and wind farms from 2026, down from 2.5-3GW to 2-2.5GW. Statkraft president and CEO blamed the change on market conditions becoming more challenging.
