The UK has space for corporate PPAs in its portfolio of operational solar assets

But the main draw of the CfD scheme is not the sheer volume of capacity that has been awarded, but the revenue certainty that a government contract can provide, as opposed to requiring a developer to find a corporate power purchase agreement (PPA) as a route to market. Earlier this year, Island Green Power CEO Bob Psaradellis called the UK CfD scheme the “gold standard” for solar investment opportunities, and this week, senior manager of PPA origination and structuring at EDF UK Ross Irvine tells PV Tech Premium the same.

“The government CfD is the main way of renewables getting built right now,” says Irvine. “It’s attractive to renewable investors [with] 20-year fixed-price certainty, with a government-backed entity.”

‘Corporate PPAs are becoming more challenging to make work’

While Irvine notes that the CfD scheme is not perfect—he acknowledges that such contracts do not include protection from negative prices, which is becoming an increasing concern amid the global clean energy transition—he says that the market fundamentals are highly attractive to developers, particularly in comparison to corporate PPAs.

“Corporate PPAs are becoming more challenging to make work, because renewable investors and renewable developers are turning more towards the CfD scheme,” he explains.

“If you’re building a new project, and corporates are looking at their future power curves, and saying: ‘I think the power curves are at £70/MWh (US$93.6/MWh), why would I pay someone £80/MWh?’; and that’s a logical financial decision that they make.”

Perhaps most strikingly, solar offtake prices reported in auctions last year were notably lower than gas prices, showing how the government CfD scheme has delivered power that is around one-third cheaper than fossil fuel alternatives. In 2025, the average auction price for a solar CfD reached £65/MWh, compared to an average gas price of £108/MWh in March-April this year.

While this latter figure is inflated by the energy crisis following the current conflict in the Middle East, the gas price of £89.3/MWh, which was reported in January-February, prior to the conflict, shows the clear overarching trend that solar is a lower-cost power source in the UK at present.

However, this is not to say that PPAs are completely unworkable in the UK. Indeed, Irvine suggests that the thinking of CfDs and PPAs as fundamentally different is perhaps unhelpful, as the former are, in effect, PPAs that involve the government.

“PPAs, for us, aren’t just corporate PPAs,” he explains. “Every asset in the market requires a PPA in some form. For example, assets with a government CfD agreement need what we term a ‘route to market PPA’ to trade their power in the market and achieve the day-ahead price needed to settle against the CfD.”

“I always find it funny when you hear people say: ‘Oh the PPA market’s dead’; no, there’s lots of different PPAs! The corporate PPA market may be quieter … but every asset in the country needs a PPA.”

Corporate PPAs for operational assets

Irvine’s thinking is echoed by trade body SolarPower Europe, which published a report earlier this year showing that government auctions were the most popular route to market for solar developers on the continent.

However, rather than suggesting that this means the end of the corporate PPA, the report’s authors told PV Tech Premium that a “complimentary” relationship between the two market mechanisms would be to the benefit of European renewables as a whole. Irvine takes this idea a step further and suggests that there is one component of the UK renewable energy space that is particularly well-suited for corporate PPAs.

“The corporate PPA market might have quieted off for new-build assets, but that leaves an opportunity for operational assets,” says Irvine. “We’re seeing loads of corporate buyers come to EDF looking to source five-to-ten-year corporate PPAs specifically for operational assets, which avoids delay risk as you know exactly when [those assets] are going to be available, so there’s no risk of them being two years late, which often they can be for new-build sites.”

“The price points are very similar, too; you’ve already built it so you’re not paying off capex or factoring capex into your decision. For an operational asset, ‘what could I sell my power for on the open market?’ is my benchmark.”

Fundamentally, many of these investment decisions in operational assets make sound financial sense: an absence of delay risk, no need to engage in costly and lengthy permitting processes and minimal capex investment all help improve the financial attractiveness of a corporate PPA, compared to a CfD.

This is particularly significant in the UK, where a generation of renewable energy projects are coming to the end of their contracts in the 24^th year of the Renewables Obligation (RO) scheme. First deployed in Great Britain in 2002, the scheme was a precursor to the modern-day CfDs and projects developed under this programme still have a significant impact on the UK’s energy mix; in 2024, projects contracted under the RO scheme delivered 78.2TWh, equivalent to 31.5% of the UK’s total energy supply.

However, Irvine says that many of these projects will have to transition to a corporate PPA in order to continue to operate and deliver Renewables Obligation Certificates (ROCs) as “a lot of the other benefits are still there” for this kind of operational asset.

“The support scheme that’s ending for a lot of developers right now is the ROC scheme, so they’re coming to the end and being phased out between 2028 and the mid-2030s,” explains Irvine. “They’ve got a decision to make [as to] whether they continue to operate the assets, how they operate the assets—they might have five more years of design life without investment being made—and they’re looking for that next bit of certainty to go: ‘can I have assurances that cover my operating costs, which allow me to keep going?’”

Transitioning from CfDs to PPAs

Irvine is optimistic that this transition from government-backed support scheme to an entirely private offtake arrangement is one to which developers would be amenable.

“If a corporate can find a site that is coming towards the end of its support scheme [or] its long-term fixed price, and the developer says: ‘we can’t operate this site much longer or there’s no revenue certainty for me, I’m considering decommissioning my site and tearing it down,’ a corporate PPA can get that end-of-life asset and keep it going for another five or ten years,” says Irvine. “It can still operate for that long with revenue certainty.”

Yet there are obvious differences between a government scheme and a corporate PPA, most notably in terms of the length of the deal that is signed. Irvine says that developers would be looking for “long- and medium-term corporate PPAs” to deliver a semblance of the long-term revenue security that they once enjoyed under the RO scheme.

He also argues that more open communication between the parties involved in signing these kinds of PPAs would be preferable, to ease the difficulty of transitioning from one kind of route to market to the other.

“Key to unlocking this new market for operational corporate PPAs is developers working out what prices they need to achieve, long before they are forced into decommission or their support scheme ends, and both developers and corporates working closely with well-connected counterparties to help find that perfect match,” he explains.

Ultimately, while the UK’s CfD scheme has been so effective as to turn developers away from PPAs, this has not removed the need, nor the attractiveness, of corporate PPAs entirely. Particularly for operational assets, these routes to market are perhaps more effective; as Irvine says of these deals: “the chance of an operational asset being successful is much higher.”

Irvine will be speaking at next week’s Renewables Procurement & Revenue Summit, to be held from 20-21 May in London. Hosted by PV Tech publisher Solar Media, the event will cover PPA design, tackling high energy prices and more; for more information, including the full agenda and ticket options, visit the event website.