UK developer claims parity in reach for projects over 40MW

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UK-based PS Renewables is “confident” of developing its 50MW Eveley Solar Farm at grid-parity in the near future and said there are still options available for utility-scale solar projects of similar scale in the country.

The UK Department of Energy and Climate Change (DECC) is proposing to cut the feed-in tariff (FiT) rates for solar PV installations by as much as 87%. Support for large-scale solar has also been slashed.

The renewable energy developer took full ownership of the Eveley project after it was granted approval in July this year, and the company has today claimed it could be developed at grid-parity through a combination of reduced component costs and power purchase agreements.

Speaking to PV Tech's UK-focused sister site Solar Power Portal, PS Renewables commercial director Matt Hazell revealed that the developer had been in conversations with its supply chain for months and was confident of sourcing components and PPAs “at the right level”, but admitted that it was “incredibly, incredibly tight”.

Eveley is also compliant with the 1.3ROC grace period, the final lifeline of the expiring renewable obligation certificate (ROC) scheme, and Hazell said that pursuing that route is still an active option for the developer, but one that would incur greater costs due to completion deadlines and other administration costs associated with government subsidies.

“If we do it under the RO, the costs go up because we have to deploy many more people to get the thing built in time. There are funders involved with the project who are looking to complete very soon, but what we feel is if we can do it under own might, then this is probably the way to do it,” Hazell added.

PS Renewables expects construction of Eveley to take approximately five months and the company is still waiting for two planning conditions to be released. While these are expected to be received imminently, it would mean the bulk of construction being carried out to tight deadlines throughout the notoriously difficult winter period. Hazell said previous winters had been “crazy” for solar farm development, with images of flooded solar farms becoming commonplace in the UK industry.   

Choosing to pursue the grid-parity model would allow PS Renewables to develop the project in a “calmer fashion” Hazell said. He added that while the company remains in discussions with funders it was possible that the company could finance the Eveley project itself, with a number of off-takers also in discussions with PS Renewables regarding PPAs.

When asked when a PPA could effectively be agreed, Hazell said: “It depends on which one [PPA] we go with, and also the eventual funder. If we're doing it [funding the project], then we could probably do it within the next month or so I would've thought.”

However Hazell admitted that scale was pivotal for achieving near grid-parity and that projects below the 40MW mark would find it difficult to replicate the “buying power” he said the company had been able to achieve.

“You need scale, you can't do it smaller. To my mind that would be impossible. But that's today, in one year, two years, or three year's time – especially as energy pricing goes back up, which is what will happen – we see that,” he said.

Renewables Obligation support for large-scale solar projects has now closed and there remains a substantial pipeline of projects eligible for the grace period. Finlay Colville, head of intelligence at Solar Intelligence, said developers would be “moving mountains” to ensure projects that do qualify are indeed built under the scheme. Colville also noted other markets in which grid-parity claims had been made by developers such as Spain, but were not shared by investors.

“Whether the UK will be any different, once ROs are gone, is yet to be seen. However, it will be the investors – not the project developers – that decide in the end. Investment hates uncertainty and a government that cannot be trusted on policy – so how this makes the UK any different to other European countries that have scuppered solar PV incentives is definitely not an easy one to see,” Colville said.

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