Boralex has signed its first UK Power Purchase Agreement (PPA), a fixed price deal with Statkraft.
The PPA is for Boralex’s 106MW Limekiln onshore wind farm, currently under construction in the Scottish Highlands. The fixed-price contract will last three years, covering the time between the expected commissioning of the wind farm at the end of 2024 and the start of Boralex’s previously secured Contract for Difference (CfD) in April 2028.
Boralex successfully secured the CfD in September last year as part of CfD Allocation Round 5 (AR5).
Michelle Lam, Statkraft’s PPA business development manager, said: “With our extensive market experience, Statkraft are well-placed to provide innovative solutions to maximise the gains from our customers’ renewable assets. I’m pleased we’ve been able to work with Boralex to agree a route-to-market for the power generated at Limekiln Wind Farm, and I hope we can build on this relationship in the future.”
Youcef Khelif, energy markets director of Boralex added: “We are delighted to have achieved this PPA for Limekiln, adding more certainty to the project through the provision of a secure revenue stream during the first years of operation, before the CfD comes into force.
“Statkraft have been great partners and we have appreciated our positive collaboration throughout the process. Limekiln is going from strength to strength and we eagerly anticipate its coming on stream later in the year.”
Despite this win, CfD system needs immediate overhaul
While this PPA represents a success for onshore wind and the CfD system, the UK’s offshore wind sector is currently facing a make-or-break moment.
A recent report from energy and climate think tank Ember warned that the UK had “three weeks to course correct” the offshore wind sector, highlighting the need for immediate overhaul to the CfD process before the allocation round 6 (AR6) begins on August 1st. Pointing to the failure of last year’s AR5 auction, where strike prices were too low to attract any offshore wind bids, the think tank is recommending that new UK prime minister Kier Starmer implements a 25% budget increase for the upcoming AR6 auction. Ember warns that without these instant changes, the UK could wildly miss its 2030 offshore wind farm capacity target of 50GW.
In the long term, Ember is urging that other changes be made to the CfD system after the AR6 and AR7 rounds have concluded, most notably encouraging that the government “explore profit-sharing mechanisms to both reduce consumer bills and lower the risk of setting the strike-price too high”, as part of an overall plan to “evolve the CfD process to move a large number of sites through development.”
