Railpen, the £34bn pension fund for railway staff, is set to benefit from the UK government’s overhaul of Contracts for Difference for solar projects.
AGR Power, one of the energy companies in Railpen’s portfolio, has secured long-term Contracts for Difference with the UK government for four solar projects totalling 146.41MW of capacity, the fund said today.
The projects, located in Hertfordshire, Cambridgeshire and Lincolnshire, were awarded a strike price of £65.23/MWh in the government’s latest Contracts for Difference Allocation Round 7 (AR7), which was met with strong investor demand.
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The government said last month that it is set to procure a record 4.9GW of solar power, following an overhaul of strike prices and Contracts for Difference. The latest renewable energy auctions in the UK received stronger investor demand, partly due to the government committing to longer contract periods, increasing terms from 15 to 20 years. It also updated prices to a 2024 baseline, whereas previous auction rounds were based on 2012 prices, accommodating inflation.
Lewis Vanstone, head of infrastructure at Railpen, said: “This outcome is testament to the hard work of the AGR team and the government’s commitment to clean energy and energy sovereignty. This significant milestone in the UK’s clean energy ambitions also highlights the importance of long-term, patient investment. We are excited to move into the next phase of development, working alongside the government, our partners AGR, and local stakeholders.”
Railpen plans to grow its infrastructure portfolio from around £1bn to between £2bn and £3bn over the next five years, with around 75% invested in the UK. The pension fund first expanded into solar energy with its acquisition of Bracks Solar Farm in Cambridgeshire in January 2023. The 30MWp solar farm began operating at full capacity in October 2023 and now supplies clean energy to the equivalent of 8,000 UK households each year.
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