Renewable energy generator Statkraft has signed a seven-year power purchase agreement (PPA) with Luminous Energy for the latter’s 28.5 MWp Bracon Ash Solar Farm in Norfolk.
Luminous Energy has secured fixed energy 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 park. Statkraft’s PPA offers balancing services and charges different prices for the two parts of the solar park.
It further provides additional security by offering physical hedges before the financial contracts take effect; this optional feature offers price certainty and the opportunity 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 yield during negative price periods, a key benefit for Luminous Energy. By responding to a price trigger from Luminous Energy and constraining the project remotely, Statkraft helps avoid unnecessary costs and relieve pressure on the electricity grid.
Luminous Energy received financial close on the 28.5 MWp solar farm in August 2023, which at the time marked the transition from the renewable energy and battery storage developer to an independent energy producer (IPP).
Guy Lavarack, Chief Investment Officer of Luminous Energy, said: “We are pleased to sign a long-term power purchase agreement with Statkraft. Their leading position in the market, the virtual power plant system and the ability to manage the complex metering schemes convinced us that they were the best counterparty to appoint for our first operational solar park.”
Statkraft’s Virtual Power Plant (VPP) system already manages its renewable energy PPA portfolio in Germany and across Europe.
Michelle Lam, PPA business development manager of Statkraft, said: “Finding new solutions to maximize returns for our customers is in our DNA at Statkraft. That’s why it was 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 optimize the options available in the market.”
Statkraft has expanded its solar and BESS ambitions in the UK with several other financial agreements, including a concurrent 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 that it will reduce its targets for building solar, battery energy storage systems (BESS) and wind farms from 2.5-3GW to 2-2.5GW from 2026. Statkraft’s president and CEO blamed the change on increasingly challenging market conditions.
