Pennon acquires first solar PV and storage project, has four more in prospect

Water company Pennon has acquired a 40GWh solar PV site in Dunfermline which is ready to build with consents in place, through Pennon Power Limited, a direct subsidiary to Pennon Group. The project is expected to commence generation in 2024, for total acquisition and build costs of £35 million. The company said the site also has the capacity for a two-hour 60MW battery at a cost of £25 million.
The project is the first part of a £160 million investment in renewable energy generation, largely focused on solar. Pennon said regarding the rest of the investment it is in advanced discussions on a portfolio of four assets, together producing 150GWh. It said the investment would increase the group’s energy security and resilience, reduce its exposure to future volatility in wholesale power markets and provide commercial returns ahead of those earned from the regulated water business.
The projects would cover 45% of Pennon’s electricity usage and would be a big step towards its 2030 target of 50% self-generation, which was recently accelerated to 2025.
In 2022/23 the company’s total power costs were around £103 million. It said wholesale energy costs were higher than historic levels and it anticipated they its costs would remain broadly flat year on year at that level, based on current market pricing and its current hedged position of 75% for 2023/24 and 30% for 2024/25.
The company’s power demand is set to increase, as part of its plans to increase available water volumes include desalination in Cornwall and pumped storage in Devon.

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