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United Kingdom

Deal secured to buy offshore output -- Contract first

French utility EDF Energy has signed a three-year offtake agreement with Danish utility Elsam for the output of Elsam's offshore wind farm at Kentish Flats off the southeast coast of England.

The £50 million deal will provide EDF with an annual 300 GWh of electricity from the 90 MW project which is due to be commissioned in May. Under the deal EDF will buy all the wind farm's output, renewable obligation certificates (ROCs) and climate change levy exemption certificates. The deal is understood to be the first offshore offtake agreement with an electricity retailer that is not the equity owner in the project.

"The deal is great news for us and a landmark for the industry," says Chris Daniels from EDF Energy, which in England owns London Energy, Seeboard Energy, and SWEB Energy and operates networks in London, East Anglia and the Southeast. The contract is in line with EDF Energy's strategy to meet its Renewables Obligation through its own renewable generation, long term contracts with third party developers and shorter term purchases of ROCs, he says.

From Elsam, Hans Buus says it was "challenging" to be the first offshore developer to negotiate a power purchase agreement with an independent power retailer. "With no precedent, it was necessary to develop the principles for the agreement from scratch."

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