Greencoat UK Wind PLC (LON:UKW) is spending £126mln on a 13-turbine wind farm in northern Scotland.
It is acquiring Belltown Power’s 75% stake in Tom nan Clach, in Nairnshire.
READ: Greencoat UK Wind makes sure-footed progress
Currently under development, the operation will be formally handed over to Greencoat next July, a month after its completion.
The Vestas V112 turbines are capable of generating 39.1 megawatts of electricity, while the load factor is expected to be 48%.
15-year CFD
Interestingly, the project will benefit from a 15-year contract for difference (CFD).
These are long-term deals that enable generators such as Greencoat to stabilise revenues at a pre-agreed level for the duration of the contract.
The purpose of CFD is to incentivise investments in new low-carbon electricity generation by providing predictability of future revenue streams.
They are an alternative to existing green incentive scheme based around renewable obligation certificates, or ROCs.
“We are starting to see attractive CFD and subsidy-free investment opportunities, of which Tom nan Clach is our first. These opportunities will complement our core ROC investments and simple, low risk fund structure,” said chief executive Stephen Lilley.
“Reflecting the overall shape of the market, we expect the majority of future investments will continue to be made from the £50bn pool of UK wind farms accredited under the ROC regime."