Dutch wind power developer buys Swindon solar plant to power Honda factory
Dutch wind power developer Eneco is making its first foray into the UK solar market, as it looks to partner with corporates seeking to purchase renewable energy directly.
Eneco confirmed days before Christmas that it had acquired the 10MW Sevor solar farm, near South Marston, Wiltshire, for an undisclosed sum. The power will be bought by Honda to help power its nearby manufacturing plant.
Since entering the UK market in 2008, Eneco has focused on wind power developments and is expected to have installed nearly 200MW of capacity onshore by the end of this year. It is also working on plans for the giant Navitus Bay Offshore Wind Round 3 offshore wind farm with EDF, near the Isle of Wight, aiming to start construction in 2017.
Eneco UK director Guy Madgwick told BusinessGreen that the solar investment was designed to diversify the company's portfolio, and replicate similar successes in Belgium and the Netherlands where it has a total of 36MW of solar capacity online.
"Solar projects are built quickly and their risk profile is lower," he said, adding that the markets in Belgium and the Netherlands are also becoming less attractive to investors, in turn making the UK more appealing.
Eneco is particularly interested in working with corporate clients looking to develop relatively large scale onsite renewables. For example, in the Netherlands the company has installed a 10MW wind farm on FujiFilm premises.
"We see these direct line customers as key to our future plans as we want to be associated with businesses that share the same values as us," Madgwick said, adding that the model benefited both parties by allowing them to avoid the costs and risks that come with buying and selling power through the wholesale market.
Although Eneco has been considering investing in UK solar for a while, the timing could serve to maximise returns from the new project. Developers are currently rushing to complete projects before a cut to the ROC subsidy scheme that comes into effect on April 1. Eneco is now working with the solar farm's previous owner AEE to complete construction of the giant project by 31 March, when subsidies for ground-mounted solar are expected to be cut from 1.6 ROCs/MWh to 1.4ROCs/MWh.
Honda have three plants in Swindon, two car manufacturing and engine manufacturing plant. Once complete, the Sevor solar farm is expected to provide nearly two-thirds of the electricity required by the engine manufacturing plant.
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Project will come online in 2025 and capture eight million metric tonnes (Mt) of carbon dioxide emissions initially, with the potential to target 30Mt later, the partners said.
Assets acquired for an undisclosed amount include the CfD-backed 14.4MW Charity Farm in Shropshire, but is largely comprised of projects backed by Renewable Obligation Certificates, companies said.