Vodafone signs solar PPA covering more than 40% of its UK energy requirements
Vodafone has this week signed its second corporate solar power purchase agreement (PPA) in the UK, which will see renewable electricity from a portfolio of five solar farms covering a significant minority of its annual energy requirements in the UK.
The ten-year PPA with Centrica as the power supplier and MYTILINEOS as the generator will see Vodafone directly procuring electricity from five solar farms in Norfolk, Nottinghamshire, Staffordshire, Buckinghamshire and Dorset.
First generation at this portfolio of projects is expected in early 2024 and, in 2025, Vodafone expects the PPA to cover some 44% of its annual energy requirements in the UK.
The telecoms giant will purchase an undisclosed “significant” proportion of the electricity output from the solar farms, thus securing their development. The remainder of the electricity output will be sold through Centrica’s Energy Marketing & Trading business.
Vodafone already sources 100% renewable electricity in the UK, but does so mainly by opting for tariffs backed by renewable energy guarantees of origin (REGO) certificates. It has stated that incorporating more PPAs and more self-generation is important to “boost the UK’s energy independence and security”, as these approaches result in additional renewable generation capacity.
Last year, the company announced its first solar PPA in the UK, also with Centrica and MYTILINEOS. This inaugural solar PPA covered three new solar farms in Lincolnshire, Worcestershire and Nottinghamshire. This built on its first-ever clean energy PPA in the UK, with two onshore wind farms. In total, Vodafone now has PPAs covering 10 UK renewables projects.
PPA price trends
The news comes shortly after the publication of an analysis of how energy market volatility in the fourth quarter of 2022 impacted the PPA market in Europe.
Produced by LevelTen Energy, the analysis covered 125 PPA price offers on 94 projects in 16 countries. Solar accounted for the majority of the PPA offers covered by the analysis, with wind accounting for just 12% of offers.
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.
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