- Santander UK provided £25m funding to support construction and operation of Voltalia’s newest solar energy farm
- All electricity generated by 49.9MW South Farm has been purchased by the City of London Corporation, fulfilling more than half its power needs
- South Farm, located near Spetisbury, Dorset, commenced commercial operations in January
Santander UK has provided £25m funding to South Farm Solar Ltd, a subsidiary of global energy producer and service provider Voltalia, to support its construction and operation of a new solar farm that will deliver more than half of the City Corporation’s electricity.
South Farm is a 49.9MW ground-mounted solar farm near Spetisbury, Dorset that has been developed, constructed, operated and maintained by Voltalia. On site grid connection has been secured with Southern Electric Power Distribution with an export capacity of 40MW, connecting to an existing tower with 132kV overhead line. The South Farm site is now complete having achieved grid connection certification in December 2022, and it began providing the City Corporation with electricity in January.
South Farm represents Santander UK’s further support of renewable energy generation assets that do not rely on Government subsidies. The bank’s funding package also provides South Farm Solar Ltd with Consumer Price Index (CPI) hedging1, giving it more certainty over the amount of revenue the solar farm will generate over the next 15 years.
100% of the power generated by South Farm has been purchased by the City Corporation, which has a 15-year power purchase agreement with South Farm Solar Ltd. The deal is part of the City Corporation’s Climate Action Strategy, which commits it to reaching net zero in its own operations by 2027, and in its investments and supply chain by 2040. It is also supporting the achievement of net zero for the whole Square Mile by the same year.
The solar farm will satisfy more than half of the City Corporation’s electricity needs, powering iconic London landmarks such as Tower Bridge, Hampstead Heath, the Barbican Centre and its historic Guildhall headquarters.
Voltalia has undertaken 23 new renewable energy facility projects with a combined capacity of 193MW in the UK. South Farm is its largest solar energy facility to date and is located near its other solar photovoltaics farms at Clifton Farm, near Yeovil, and Higher Stockbridge.
Simon Holt, UK Country Manager at Voltalia said: “Through our work with Santander UK in funding the South Farm project we have been able to fully realise a brand new, substantial green energy project at South Farm, Dorset. We expect an increasing number of companies and organisations in the UK to be switching to cleaner, sustainable, renewable energy supplies and we will continue to deliver a net-zero power purchase solution as our portfolio grows. The UK has the capacity, enthusiasm and the sunshine to deliver many more of these projects in the coming decades and we hope that projects like South Farm add to the bankability and confidence in UK renewables.”
Howard Whitehead, Senior Relationship Director at Santander UK said: “We are delighted to support South Farm with this funding, which builds on the long-standing relationship between Santander and Voltalia internationally. Santander UK is proud to support organisations such as Voltalia that are generating renewable energy in the UK, especially when it puts organisations like the City Corporation a huge step closer to achieving their goal of becoming carbon neutral in future. This transaction demonstrates our continued support for standalone Government subsidy-free renewable energy generation assets and is the first in which we have provided CPI hedging to a renewable energy client.”
Keith Bottomley, Deputy Policy Chairman at the City of London Corporation said: “This scheme is a pioneering blueprint by the City Corporation for local authorities across the UK, cutting carbon emissions and giving cheaper, more secure energy, protected from the price volatility of energy markets. The deal will increase our green energy supply, has no reliance on taxpayer funding, and helps us transition quickly away from fossil fuels.”
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Note to editors
1) The Consumer Price Index (CPI) increases or decreases over time. CPI hedging involves the bank and client agreeing a set CPI percentage rate that will remain fixed for a set period of time irrespective of fluctuations in CPI. In this case, a portion of the revenue Voltalia will receive from the City Corporation tracks CPI. Santander UK has provided hedging on this, which gives Voltalia a consistent, unchanging rate for the CPI-linked portion of its revenue throughout the 15-year power purchase agreement, meaning it has a more predictable and stable revenue stream over the period.