Banks Renewables are a successful independent renewables developer and operator that has previously developed and constructed numerous projects across England and Scotland.
Statkraft and Banks Renewables signed their first Power Purchase Agreement (PPA) together in 2011.
Banks Renewables recently re-financed a portfolio of their operational Renewable Obligation Certificates (ROCs) projects which included five that had Statkraft PPAs. As part of the re-financing process they decided to review the PPA options available to them.
Phil Whyman, Commercial Finance Manager, Renewable, Banks Renewables said “We have a long working relationship with Statkraft and have always received excellent customer service throughout this time. We are pleased to enter into new PPAs for these five projects. Their offer of new commercial terms on two of the projects was very competitive and we also welcomed the opportunity to re-negotiate the original terms on the other three contracts. That Statkraft were interested in contracting beyond projects’ RO expiry was also of interest to us.”
The PPAs for Armistead and Penny Hill wind farms with Statkraft were due to expire in 2019 and following a competitive tendering process Statkraft were selected to enter into new PPAs until 2029.
20-year PPAs – removal of floor prices
For the other three projects, Statkraft and Banks Renewables already had long term contracts in place running until around 2030. These contacts had floor prices in place that were agreed when the original PPAs were entered into.
It was agreed that the floor prices would be removed in exchange for improvements to the commercial terms. As part of this re-negotiation process the three PPAs were also extended until 2038 (i.e. 20 year contracts) For each project the new PPAs will now continue for a number of years after the project’s ROC expiry and so Statkraft will be purchasing electrical output only.
On all five PPAs Statkraft and Banks agreed new contact forms using Statkraft’s updated, more efficient settlement process.
John Puddephatt, Business Development Manager at Statkraft said ”We have worked with Banks Renewables successfully for many years and so are pleased to continue to do so, up until 2038 on some of the projects. The updated commercial terms are useful for Banks Renewables and Statkraft and both parties will also benefit from the introduction of our updated settlement system which will help minimise administration for both sides.”