Statkraft signs PPA for 80 MW solar plant, with storage in pipeline

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Statkraft has signed a 10-year PPA and optimization agreement for an 80 MW solar farm and 8 MW battery storage in Yorkshire, England. Scurf Dyke Solar Farm is one of the largest solar installations in the United Kingdom.

The Norwegian generator signed the PPA deal with international investor FP Lux Group, a renewable energy fund advised by re:cap, itself a wholly owned subsidiary of FP Lux Group parent organization First Private.

Scurf Dyke Solar Farm secured its license to generate electricity from industry regulator Ofgem on April 15, 2024, but the project’s battery energy storage system (BESS) has not yet been commissioned. BayWa re is building the 8 MW/16 MWh BESS, having previously provided EPC services to develop and construct the solar plant.

Statkraft has argued that the way Scurf Dyke Solar Farm was financed means securing a long-term offtake contract was important to show a clear route to market for power and the Renewable Energy Guarantees of Origin (REGO) certificates the project can produce. The plant previously secured a 49.9 MW allocation at a strike price of GBP 45.99 ($59)/MWh contract-for-difference (CfD) allocation in the fourth CfD round for Great Britain. The CfD covers deployment in the 2024-25 financial year.

“Following a competitive tendering process, Statkraft were selected as the offtaker for Scurf Dyke. Given the size of the project, the counterparties involved and the potential addition of a BESS, we were particularly excited to be involved,” said John Puddephatt, Statkraft’s PPA origination manager. “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.”

A Statkraft spokesperson also confirmed to pv magazine that the company has now signed PPAs with six projects included in the fourth CfD round. These include Scurf Dyke, two seven-year PPAs announced in July 2023 with British energy generator Infinis, and three PPAs which have not been made public.

Earlier in July 2024, Statkraft signed a PPA with UK developer Luminous Energy covering a 28.5 MW solar plant in England that had secured fixed power prices through the fifth CfD allocation round, as well as a virtual corporate PPA with Bristol Airport. Statkraft’s spokesperson confirmed the company’s solar PPA portfolio in Great Britain is now 1,425 MW, and it also has 2.4 GW of contracted flexible capacity on the British grid, including batteries and gas.

Statkraft’s announcement of a new solar plus storage PPA in the United Kingdom follows a significant decline in battery revenues from their previous high watermark. In 2022, revenues for the BESS fleet in Great Britain hit GBP 156,000 per MW per year, according to Modo Energy. The battery analytics platform developer found revenues averaging GBP 27,000 per year from November 2023 to February 2024. Statkraft’s spokesperson acknowledged that operation in short-term merchant wholesale markets are naturally volatile for batteries. “This is simply the nature of this asset class and short-term optimization.”

“Statkraft is able to offer various structures to manage risk under battery optimization agreements through long-term floors, providing downside protection, as well as forward-market hedging that allows owners to manage risk associated with this volatility,” they said.

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