Tidal project secures £50m power purchase agreement

The MeyGen tidal array has secured a 10 year power purchase agreement with SmartestEnergy which could pay the generator more than £50 million over the lifetime of the project.

The world’s largest tidal project signed the PPA with independent energy provider SmartestEnergy in order to secure long-term revenues for the project, MeyGen chief executive Dan Pearson said.

“The agreement with SmartestEnergy will secure the long-term revenues which will demonstrate the commercial viability of the project and also highlight the wider potential of tidal stream generation to become a significant industry,” Pearson explained in a statement.

SmartestEnergy provides PPAs to over 600 renewable energy projects across the UK to provide the generators with a route to market. The third-party recently launched a Contracts for Difference (CfD) compliant PPA ahead of full implementation of the UK government’s electricity market reform.

The first phase of the project will have a capacity of around 6 MW but could increase to as much 400MW under the current 25-year seabed lease agreement made with The Crown Estate. Construction is expected to commence in Q4 2014 with first power to the grid and revenues being earned in H1 2016.