Octopus Renewables Infrastructure Trust (ORIT) announced yesterday (25 April) that it has secured a power purchase agreement (PPA) with Sky UK for its Crossdykes wind farm in Lanarkshire, Scotland.
The PPA will enable the sale of 65% of the electricity produced by the 46MW wind farm. Sky will pay a CPI-linked fixed price beginning in April 2025 for a period of 10-years. Crossdykes is expected to generate a total of about 144GWh of electricity each year.
Phil Austin, chairman of ORIT, said: “Renewable energy supply deals with major corporations like Sky help meet vital targets to decarbonise their businesses.”
ORIT acquired 51% of Crossdykes in 2022 alongside another fund managed by Octopus Energy, Octopus Renewables Infrastructure SCSp, in 2022.
The agreement will increase the percentage of ORIT’s forecast revenue, fixed over the two years to 31 December 2025, from 81% to 82%, and the percentage of forecast revenue, which is index-linked over the 10 years to 31 December 2033, from 51% to 53%.
Last year, Current± reported that ORIT’s unaudited NAV at 31 March 2023 was 107.7 pence per Ordinary Share – down from 109.4 pence per Ordinary Share at 31 December 2022. Its overall NAV fell from £618 million to £608 million.
ORIT attributed “significant reductions” to power market forward prices applied to forecasts between 2023 and 2025. 25% of the decrease was related to the company’s UK sites, owing to the nation’s higher exposure to variable pricing.
On the PPA with Sky, Austin added: “The contract underscores the strength of our Investment Manager’s energy markets team as they implement our strategy to deliver a high proportion of fixed revenue and inflation linkage, providing added certainty to our portfolio for the long-term.”
Onshore wind in the UK
The scope for onshore wind energy is huge: analysis from Friends of the Earth revealed that 374,900 hectares – totalling 2.9% of land in England – are suitable for new onshore wind and solar farms.
The research found that if all the land identified were developed for onshore solar or wind, 2.5 times more electricity than currently required to power all households in England could be produced.
