NextEnergy Solar Fund Ltd (LSE:NESF) said it successfully secured additional subsidised solar contracts in the UK for 86 megawatts of planned capacity through the fourth ‘Contracts for Difference’ allocation round.
Overseen by the government-backed Low Carbon Contracts Company, the round issues contracts for difference, or CfDs, to low-carbon electricity producers to ensure generators have price certainty.
Contracts are awarded through a competitive allocation process which determines the pre-agreed price.
The generator then has a number of milestones to meet within the first few years of the contract in order to preserve the term for payments. The CfDs typically last 15 years.
This includes proving commitment to the project within 12 months of contract signing and commissioning 80% of the initial capacity estimate within the target window.
NextEnergy’s CfDs have been secured for the generating capacity of Whitecross (36MW) and Hatherden (50MW), the company's latest UK solar projects.
The CfDs are index-linked and are scheduled to begin on March 31, 2025, at a strike price of £45.99 per megawatt hour.
Whitecross solar farm is currently under construction in Lincolnshire with work expected to be complete in the first quarter of next year.
Grid connection and construction mobilisation activities are underway for Hatherden solar farm in Hampshire, which is anticipated to be energised in the first half of 2023.
NextEnergy Solar Fund is a specialist solar and energy storage climate impact fund, with a combined installed power capacity of 865 megawatts.