DIF announces first UK solar-plus-storage offtake agreement

The hybrid PPA – supported by software and advisory business, Pexapark – covers a 55 MW solar farm with a 40 MW/80 MWh battery storage system in Leighton Buzzard, providing clean energy and secured revenue across the solar and battery energy storage system (BESS) over a 10-year term. The market-first hybrid PPA will also provide secure and bankable revenue streams for both the solar farm and storage system.

This new agreement comes off the back of massive growth in interest in the co-location of solar-plus-storage projects in the UK, as solar investors turn to batteries to maximise the value and flexibility of their assets in the post-subsidy market. 45% of all solar planning permissions submitted in the UK in the past two years have been for hybrid systems encompassing storage.

This trend is reflected in the wider European market, where, according to Pexapark’s recent survey data, 64% of renewable energy businesses are now seeking to introduce or increase the proportion of energy storage in their portfolios.

Over the past decade, PPAs have provided an important revenue stream and hedging mechanism for renewable energy developers and offtakers looking to trade in Europe’s post-subsidy markets. However, PPAs for co-located projects have remained difficult to agree on because of their complex operational usage profiles and contracting structures. This has limited the options available for financing solar hybrid pipelines.

By providing secure and bankable revenue streams, Pexapark highlights that the DIF hybrid PPA provides a model for the wider market to follow in order to reach scale amid the broader energy transition across GB and the EU.

"We’d like to congratulate DIF on this PPA, which marks the first of its kind in the UK and Europe more widely. This agreement reflects our commitment to finding new PPA solutions for unsubsidised renewable energy developers and offtakers, with contracted revenues that offer attractive returns and low risk profiles for investors,” said Brian Knowles, Director of Storage and Facility, Pexapark.

“We anticipate that this deal will be the first of many, representing a turning point for the European sector in the deployment of bankable solar hybrid projects. In the long run, agreements like this will be essential for integrating high shares of intermittent renewable energy generation into the grid," added Jack Rankin, PPA Transaction Advisory Regional Lead GB and Ireland.

Read the article online at: https://www.energyglobal.com/other-renewables/10072023/pexapark-supports-first-uk-solar-plus-storage-offtake-agreement/