Clayhill Solar Farm & Storage, UK


The UK’s first subsidy-free solar farm

Clayhill Solar Farm in Bedfordshire, UK, was developed by Anesco. It is a 10MW, ground-mounted PV power project.

The farm uses over 31,000 polysilicon solar panels provided by Chinese vendor BYD, but was constructed in just 12 weeks. It formally opened at the end of September 2017

The project is the first in Europe to use 1,500V string inverters provided by Huawei (135 of them). To maximise yields they includes maximum power point trackers and 12 directly connected string inputs to improve the flexibility of the PV strings.

The solar farm covers 18 hectares and is expected to generate 9,634MWh of renewable electricity per year. That’s a capacity factor of just 11%, indicating a paucity of solar resource that has previously made subsidy an indispensable element in the growth of UK solar.

Clayhill Solar Farm had not been a recipient of a government CfD (Contracts for Difference) contract – the UK’s current mechanism for providing renewable power projects with fixed-duration, fixed-price revenue streams. It was also constructed after the UK’s previous (Renewables Obligation, RO) support scheme had closed to new applicants at the end of March 2017. (The RO scheme had enabled renewable power projects to generate revenue by generating RO certificates – ROCs). In short, it had access to no subsidy scheme which it could use to help its business case.

As government subsidy schemes have been reduced and withdrawn, it’s worth noting that no plants over 25MW have been built in the UK since 2016 and that there has been no development of 5-25MW projects since the Renewables Obligation scheme expired (at the end of March 2017).

 

source: anesco.co.uk

 

Co-located storage

6MW of battery energy storage (also from BYD) has been co-located on the site, housed in five 1.2MW containers.

Anesco plans to bid power generated by the Clayhill into the National Grid’s “T-4” capacity market and its enhanced and fast frequency response markets to generate additional revenues.

Although the PV farm is built and operating, at the time of writing the batteries are currently sitting idle. That’s because it is prerequisite for bidding into the capacity market that projects hoping to pre-qualify must be newly built. That’s so that market can claim to be stimulating new capacity, rather than simply giving revenue to existing projects. The batteries are expected to be pre-qualified to bid for capacity market tenders in mid-November 2017, so will stay switched off until after that.

To further strengthen their revenue opportunities, in addition to contracting directly with the National Grid, the batteries will also be contracted into the aggregation business run by Limejump.

Limejump already operates the largest portfolio of energy storage projects in the UK, combining their speed of response with the flexibility of distributed generators and commercial assets. This combination enables them to participate this aggregated portfolio in the UK’s dynamic frequency response contracts.

Anesco have been open about the fact that, in the absence of the revenue streams accessible by its battery component, the project would not be profitable through its solar energy revenues alone.

(As an aside, industry analysts suggest that solar on its own can achieve a price of £50-54/MWh or lower, close enough to the UK wholesale price that projects would be almost subsidy free. Even then, they are dependent on access to the UK’s CfD support scheme though, for certainty of price and contract duration. Otherwise the costs of finance are higher because the risks are higher).

 

Access to the grid

The Clayhill site also benefited from some very specific circumstances. Adjacent is another, entirely separate Anesco solar development (“Hermitage”). That is a 5MW site, previously connected under the Renewables Obligation scheme in 2016 (and generating 1.2 ROCs for each MWh of output). That project established all the required grid connections and had significant spare capacity, access to which reduced the cost of the Clayhill development.

In particular, there is enough import and additional export capacity on that part of the electrical grid to enable the co-located battery storage scheme. That’s crucial to the financial viability of the project, since the battery system must have its own level of independent import and export capacity to access National Grid’s ancillary services and capacity markets, “revenue” stacking above and beyond solar time-shifting and energy price arbitrage. To have export capacity available for both a solar farm and a battery is very rare.

Other solar developers developing the same size of project would have typically budgeted up to £100,000 per MW for a grid connection. So the Clayhill development saved about £1 million.

Unless the prices of both PV and battery systems fall further, it is almost certainly the case that co-located projects such as this one will remain impossible without subsidies in the UK, unless similarly favourable grid conditions exist.

 

Retrofitting battery storage: a policy breakthrough

One obvious question to ask is: why not add battery storage to an existing solar farm, where the grid exists?

Most developers have previously been held back from this approach because of regulatory uncertainty over the impact of added storage on their existing subsidy support schemes. In particular, for solar farms dependent on ROCs for their financial viability, it wasn’t clear whether (or to what degree) the awarding of ROCs would be impacted, if energy was now fed into a battery rather than directly into the grid.

Recently though, three 5MW solar farms developed by Anesco under the ROC scheme (located in Northampton, Chesterfield and Stratford-upon-Avon) were granted permission to receive ROCs for the electricity supplied to added, onsite 1.1MWh batteries. This decision, by energy regulator Ofgem, was a first for the UK and likely to be a game-changer. It is believed likely to trigger a rush among other solar plant owners to install storage capacity at their solar farms (ones that already receive the ROC).

Anesco itself announced that it would be speaking to investors about adding battery capability at all of its existing UK solar sites: 101 in total.

In total, Anesco plans to build an energy storage portfolio of 185 MW in the UK by the end of 2018. That would make it the UK’s largest energy storage portfolio. As with the Clayhill example, the whole portfolio will be developed in collaboration with aggregated battery network operator Limejump; adding to their “virtual power plant” system. The latter delivers sub-second dynamic frequency response to the National Grid.

Even before being physically built, the 185 MW storage portfolio entered into the UK’s forward capacity market in August 2017 (which was for the delivery of capacity in the winter of 2020/2021).

 

Last updated: October 2017

 

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