Quinbrook Infrastructure Partners, an energy transition-focused investment manager, has signed two long-term offtake agreements for solar power generation from its Cleve Hill Solar Park project.
The agreements, signed with Tesco and Shell, cover 100% of the project’s expected power generation. Additionally, the agreement with retailer Tesco is the largest solar corporate power purchase agreement (PPA) executed in the UK to date, Quinbrook said.
That agreement, for a period of 15 years, will account for 65% of Cleve Hill’s expected solar generation.
The agreement with Shell, meanwhile, is a 10-year route to market agreement with Quinbrook to manage 100% of the capacity that was secured by Quinbrook under a 15-year contract for difference (CfD) in July 2022 as part of the UK’s Allocation Round 4 (AR4).
This is equivalent to 35% of the expected solar generation from Cleve Hill.
Quinbrook added that the CfD contract award was the largest received by a UK solar project as part of what was at the time the biggest ever round of the UK government’s auction scheme.
The two offtake agreements provide long-term index-linked revenues for Cleve Hill, which Quinbrook said offers revenue certainty for its investors as well as providing a hedge against rising inflation.
“The offtake agreements secured with Tesco and Shell are a testament to this landmark renewables project for the UK and represent a significant milestone in delivering long-term inflation linked revenues for our investors, supporting new construction and jobs,” stated Quinbrook’s managing director and UK regional lead, Keith Gains. “Cleve Hill has set new benchmarks for UK solar and helps Quinbrook further its efforts to support the UK’s decarbonisation goals and energy independence through large-scale solar and battery storage projects.”
Cleve Hill has a capacity of 373MW of solar generation, alongside 150MW of battery storage capacity. According to the announcement, this makes it the largest to be built in the UK to date – though larger solar farms have since been approved by the UK government and are expected to enter service over the coming years.
Cleve Hill was the first project of its kind to be approved as a Nationally Significant Infrastructure Project by the UK government in 2020. It is due to enter service in early 2025.
Battery energy storage systems (BESS) are considered key to maximising the potential of renewable power, given the intermittent nature of wind and solar generation. As a result, many developers are opting to develop combined projects incorporating both generation capacity and storage.
Tesco’s group CEO, Ken Murphy, said Cleve Hill would be able to generate up to 10% of his company’s electricity demand. It is the latest in a series of PPAs announced by Tesco over the past five years as the company works towards carbon neutrality across its operations by 2035.
For Shell, the agreement with Quinbrook also represents an expansion of its UK PPA portfolio, said Shell Energy Europe’s head of power and systematic trading, Rupen Tanna.
“Combined solar and battery storage projects such as this have a vital role to play in driving forward the UK’s transition to a flexible and low-carbon energy future,” stated Tanna.
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