A 15 year power purchase agreement is paving the way for a £70m investment in renewable energy.
The deal struck between green energy investors Low Carbon and SmartestEnergy will cover generating capacity of 65MW, enough to power more than 20,000 UK homes.
An initial 23MW of capacity under the PPA has been provided by four ground-based solar projects in Dorset, Devon and the Isle of Wight and they are already generating energy.
The remaining output will commence construction in the near future and is expected to be onstream within a few years. All the energy from these future projects will come from renewable generating sources.
Low Carbon, which only started trading in its current form last year, raises finance mainly from private sources and takes the risk in developing renewable energy projects. Its Chief Investment Officer John Cole (pictured) said the deal with SmartestEnergy was a real positive for green energy.
“We are growing and targetting 200MW of development this year. This deal with SmartestEnergy is great news we went with them because they were flexible and had a product that worked, apart from that they kept to their word and we had good chemistry. We only do renewable energy and needed someone to buy it with the same beliefs.”
Iain Robertson, Head of Generation Sales for SmartestEnergy, said: “Banks are looking for greater security and the fact we are able to provide such long term deals on both the power generated and the ROC payments is helping projects secure the finance they need to proceed.”
The deal comes in what many believe is a hiatus of green investment as Government policy and industrial attention has turned more towards gas in recent months but Mr Cole says long term funding of green projects is the way forward.
He added: “We do need a policy set for the long term and it’s very important we are committed to doing low carbon. But I don’t think we will have a problem selling our electricity and green generation should only grow in the future energy mix.”