Tarmac signs construction industry's first PPA with Welsh wind farm
Elaine Brass
9th October 2009
Tarmac has signed a Power Purchase Agreement (PPA) with Welsh wind energy producers, Nuon Renewables – the first PPA of its kind in the construction industry.
The PPA allows Tarmac to buy discounted energy directly from the producer and sell onto power retailer NPower through a sales agreement already in place.
The five year, £3.5 million deal is due to start this month, with Tarmac buying the entire output of Nuon’s seven turbine wind farm at Pendine Sands in south west Wales. It will provide an initial 14.3 gigawatt (GW) hours a year of power, approximately three per cent of Tarmac’s overall energy use.
Initially, the wind energy generated will be pooled into Tarmac’s total power consumption, but the company said it had the option to use the green energy to power specific UK sites if required.
Rob Turner, senior manager for direct sourcing at Tarmac, said the deal with Nuon wasn't just about the financial benefit of being able to purchase green energy at non-premium prices. “This is a reciprocally beneficial partnership between Tarmac and Nuon. This is principally, for Tarmac, about buying into a source of renewable, sustainable energy," he said.
Turner added that the PPA would also help to support the construction of new renewable energy facilities. "By securing a buyer for the energy in advance, the capital risk for Nuon and its financers is reduced," he said.
Rob Baylis, head of finance at Nuon Renewables said the deal was both "innovative and sensible [...] We are determined to make electricity clean and contribute to preventing climate change. As more clean power is generated in the UK by wind farms, the opportunities to sell direct to users will increase," he said.
Tarmac said the three per cent of energy it would be sourcing from Pendine was an ideal volume for a trial period, but that it hoped to increase the volume significantly in the near future, while working with Nuon to grow renewables further in the future.
“This is a long term partnership," said Turner. "We want to see how this works at first, then if everything goes to plan we will talk with Nuon about developing Tarmac land for wind farm projects.”