Two UK solar projects completed to provide renewable electricity to H&M Group
H&M Group has confirmed the completion of two new solar projects in Leicestershire, through which it will source renewable electricity under a multi-year power purchase agreement (PPA).
The Streetfield and Northfield House solar projects collectively provide an output of 50MWp – enough to power around 15,000 homes. This power will be directly supplied to H&M Group for use in its stores, offices and other UK facilities under a multi-year agreement.
The retail conglomerate – which owns brands including Cos, & Other Stories and Monki as well as its namesake H&M – is aiming to source 100% renewable electricity for its global operations by 2030. Its most recent corporate sustainability report confirmed that a 95% renewable electricity mix was achieved in 2021.
H&M Group has worked with Lightsource bp and Schroders Greencoat on the PPA with the two Leicestershire-based solar projects since 2021. Lightsource bp committed to build the assets on behalf of Schroders Greencoat. When the projects entered operations, ownership was transferred to a fund managed by Schroders Greencoat, but Lightsource bp retained responsibility for long-term operations and maintenance.
“Projects like these are a clear demonstration of how renewable energy partnerships between developers, investors and corporations can play a vital role in enabling the UK’s energy transition,” said Lightsource bp’s chief executive for the EMEA and APAC regions, Kareen Boutonnat.
“We are pleased to continue growing our partnership with Schroders Greencoat, and support H&M Group’s decarbonisation targets.”
Globally, Lightsource bp is aiming to host a solar portfolio of 25GW by 2025. At present, its current portfolio stands at around 3.8GW.
Transport for London
In other PPA news, Transport for London (TfL) has relaunched its first PPA, which will enable the organisation to source 10% of its electricity directly from new-build renewable energy assets.
TfL first launched its PPA last June in a bid to increase the share of renewable electricity used to power the capital’s tube network. But it subsequently paused the tender, citing “unprecedented uncertainty in the market”.
TfL is one of the largest electricity consumers in the UK, with an annual demand of 1.6 TWh. London Mayor Sadiq Khan has set an ambition for TfL to procure 100% renewable energy by 2030 as part of the capital’s plans to reach net-zero operational carbon emissions by this point.
“TfL has a vision to be the strong, green heartbeat of London and I’m delighted to open to the energy market a new opportunity that will mean creating green jobs from a secure and reliable source,” said TfL’s chief safety, health and environment officer Lili Matson.
The news comes shortly after the publication of analysis of how energy market volatility in the fourth quarter od 2022 impacted the PPA market in Europe.
Produced by LevelTen Energy, the analysis covered 125 PPA price offers on 94 projects in 16 countries. It revealed an 11.4% quarter-on-quarter increase in solar PPA prices across all markets, or a 60% increase year-on-year.
The quarter-on-quarter increase was steepest in the UK, at 30%. Italy also saw a significant increase of 20%.
LevelTen Energy has attributed these trends to a mix of economic, supply chain and regulatory challenges. It has also argued that, in the UK, Government renewable auctions also likely played a role.
“More capacity going to government auctions means less is available for corporate buyers, leading to higher PPA prices,” said the organisations’ senior manager of developer services for Europe, Frederico Carita.
Solar accounted for the majority of the PPA offers covered by the analysis, with wind accounting for just 12% of offers. The analysis has revealed that demand for wind PPAs remains high, but supply is facing issues, predominantly to do with development timelines that are increasing. “The market desperately needs permitting reforms to kick in faster,” the report notes.
The Energy Transitions Commission recently revealed the longest renewable development timelines in Europe, which stand at 12 years for offshore wind, 10 years for onshore wind and four years for utility-scale solar. It believes that the timelines can be at least halved with policy intervention to streamline planning and permitting regimes, without weakening social and environmental standards.
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