Combating climate change with PPA - Iceland Foods and Octopus Energy

Shoosmiths energy and infrastructure team was instructed by Iceland Foods on a corporate power purchase agreement (PPA) with Octopus Energy.

The energy and infrastructure team has advised Iceland Foods on a ten-year corporate PPA with Octopus Energy’s generation arm, supporting Iceland from heads of terms stage through to the negotiation and completion of the PPA. The signing of the PPA will see green power supplied to the frozen food retailer from the Breach solar farm in Cambridgeshire, which energy giant Octopus manages on behalf of Octopus Renewables Infrastructure Trust (ORIT). Octopus Energy Generation acquired the c.67 MW Breach solar farm in June 2022 on behalf of ORIT. The solar farm construction began in November 2022 and is scheduled to become operational in Q4 2023.

The solar farm will provide c.64 Gigawatt hours (GWh) of renewable energy every year to power 150 sites, which will cover 14 percent of Iceland Foods’ electricity needs for its UK stores. Head of Energy and Infrastructure sector at Shoosmiths, James Wood-Robertson led on the deal, supported by principal associate James Haikney. 

With nearly 1,000 stores in the UK, this deal with Octopus will reduce Iceland Foods’ emissions by 23,000 tonnes of CO2, the equivalent of removing over 12,000 petrol cars from the roads or planting over 110,000 trees every year.

James Wood Robertson commented: “We are delighted to have supported Iceland Foods on this deal – its first corporate PPA entered into at such an important time when so many corporates are looking to hedge their exposure to high energy prices.  Crucially, the deal, which was concluded quickly and efficiently, will also underpin the delivery of new clean energy generation, demonstrating Iceland Foods’ commitment to green energy.”

Graham Ireland, Head of Energy at Iceland Foods said: “This deal with Octopus is an exciting step in our journey towards achieving net zero by 2040 and also provides some certainty on our energy costs for the coming years – at a significant discount to the current wholesale price.  Shoosmiths has an excellent reputation for advising on corporate PPAs and we really benefited from their experience and the invaluable assistance and advice they provided on this transaction.”