‘Sustainable consumption’: Vattenfall to offer corporate PPAs for South Kyle Wind Farm

Businesses are being offered the chance to purchase power direct from one of Scotland’s largest onshore wind farms in a move that could throw a lifeline to the UK’s onshore wind energy industry, Swedish developer Vattenfall confirmed today.

The renewable energy giant announced it is seeking to sell power from the planned South Kyle Wind Farm in South West Scotland via corporate Power Purchase Agreements (PPAs).

The contracts would provide companies with index-linked fixed prices for clean power for periods of between 10 and 20 years in multiples of 1 MW. Vattenfall said each MW of capacity would provide companies with around 3GWh of power each year.

The offer is particularly significant, as South Kyle was one of the first major wind farm projects to secure planning permission after the government effectively withdrew subsidy support for new onshore wind projects.

The project was granted planning approval by the Scottish government last summer for 50 turbines with up to 165MW of new capacity.

Speaking at the time a spokesman for Vattenfall urged the government to allow onshore wind farms to bid for price support contracts through the existing contract for difference regime.

“Like the rest of the industry, Vattenfall looks forward to the day when onshore wind can operate independent of subsidy,” he said. “However, we do believe that a further CfD auction round that includes onshore wind is in the interests of the British consumer and in the interests of driving down greenhouse gas emissions in Scotland. If that auction were to take place it is clear to us that the clearing price would show onshore wind to be the lowest cost generator in the UK, and remarkably cheap.”

However, he also declined to rule out the possibility of the company identifying an alternative route to market for the project, such as securing PPAs ahead of its construction.

The company now looks set to proceed with the PPA approach and Vattenfall’s UK Originator, James Hunt, said the contracts could meet growing demand for clean energy from across the business community.

“More businesses are starting to recognise the importance of taking a longer term approach to tackling climate change in both their operations and through their supply chains,” he said in a statement. “Corporate PPAs can be part of the solution to fix all or part of their energy prices.

“Vattenfall understands the importance business consumers place on building long term relationships with their suppliers and we are pleased to be able to help UK business consumers with their climate goals by powering their sustainable consumption now and in the future.”

The new contracts are currently being marketed by consultancy Mitie Energy and the company is open to tenders until June.

The South Kyle Wind Farm is located 5km to the east of Dalmellington within both East Ayrshire and Dumfries and Galloway. It is expected to deliver up output of 500GWh of clean power per year.