• 500 MW of operational assets and up to 1 GW reaching RTB in the next 12 months
• Partnering with datacentre developers as industrial power demand rises
• Developing a multi-buyer PPA model to tap the SME market

Swedish solar and storage IPP Alight is exploring partnerships with datacentre operators in preparation for a rise in Nordic power prices driven by industrial demand, said Johan Hernström, chief commercial officer at Alight, in a recent interview with NPM.

A new focus on co-location and hybridisation has informed Alight’s development strategy, most recently in the acquisition of a 2 GW solar portfolio from Soltech in southern Sweden.

The deal raised Alight’s development pipeline up to around 6 GW of capacity. It manages 500 MW of operational assets across Finland, Sweden and Denmark, having inaugurated the 215 MW Lidsø solar park and the 101 MW Eurajoki solar park in 2026.

Alight also holds close to 1 GW at or approaching RTB in 2027, and its efforts in the coming year will be dedicated to bringing its operational portfolio past 1 GW.

The company has undergone a transformation in recent years following CVC DIF’s purchase of a majority stake in 2022. Once a pure-play developer, it is now an IPP with plans to build and own assets for the long-term.

These ownership plans will remain focused on the Nordics for the foreseeable future, not least because of Alight’s experience across the region. It also sees plenty of opportunities amid rising demand. Nordic power prices are still noticeably discounted compared with western Europe, but Hernström foresees change coming.

Nordic demand side set to grow

“The price discount that southern Sweden has seen to continental Europe is a post-2020 phenomenon. The reason we’re not coupling to continental prices as often today is due to Sweden’s power balance surplus… But, if you look at the expected demand growth from steel, mining, chemicals, forestry and data centres, it’s quite significant and we think that the surplus will shrink.”

This could yet come to Sweden’s less hospitable northern regions, which benefit from strong wind conditions and solar radiation. Industrial development is shifting north too, following companies like Stegra, which is continuing construction at its green steel plant in Boden.

Hernström cites Google’s recently announced PPAs in Finland as an example of the investments that international corporates are committing to the region. As part of its EUR 13bn Nordic digital infrastructure spend, Google has signed 10-year agreements with VALOREM and Suomen Hyötytuuli for windfarm offtake as well as a major 22-year PPA with Fortum for the Loviisa nuclear power plant.

Alight has received more inbound enquiries about its own power supply of late, but given the ongoing disruption to physical commodity markets, it is unclear whether this is a structural shift.

Regardless, Alight is looking to grow in tandem with emerging sources of demand.

Its new strategy is to partner with datacentre operators in the development phase and construct new solar plants alongside or nearby to datacentres. Co-developed projects can make use of the same grid nodes and assuage concerns about the impact of digital infrastructure on regional power supplies.

Grid constraints

According to Hernström, the short-term bottleneck to datacentre development is not power, but simply grid access, a problem that is well understood by renewables developers.

“More and more regulation is pointing towards the “bring your own generation” model. We’ve seen something similar forming in Denmark and in Finland. We think we can add a lot of value alongside datacentre developers, not only because of our ability to get steel in the ground, but also because we have these relationships with grid operators and with local communities.”

Grid constraints have prompted another core element of Alight’s buildout strategy: co-location and storage. The company will no longer develop standalone solar projects and it is working to retrofit its existing assets. Hernström sees this as a natural process in a maturing renewables market.

Its advantages for Alight are threefold:

“The economics for standalone PV have deteriorated, both on the revenue side and on the cost side. All this has happened at a time when BESS CAPEX has fallen quite significantly. That’s why the proposition of co-located PV and BESS is so interesting, as it allows us to build a more attractive hybrid PPA product. Secondly, we can use BESS to reduce overall running costs for the PV plant. Thirdly, we want to use BESS to participate in power trading, including wholesale (day ahead and intraday) as well as ancillary services. We couldn’t have done (co-location) five years ago, because then BESS was simply too expensive.”

Blended solar & storage PPA

In an ideal scenario, Alight will contract both solar and storage capacity to an offtaker under a single PPA. Under a flexible agreement featuring both generation and storage, Alight can shape the supply to match the pattern of a client’s consumption.

Storage can also reduce solar capture losses caused by grid congestion and add to a project’s margins through merchant trading.

Alight continues to operate on a subsidy-free approach to project revenues, focusing exclusively on commercial PPAs.

“We always want to secure a power purchase agreement before we make an investment decision. That has been the DNA of the company and we’ve always had this commercial muscle,” said Hernström.

To this Alight is continuing to innovate on the PPA formula with a new multi-buyer model, which it is currently running as a pilot in Sweden. Here Alight brings together a group of SMEs that otherwise would not have the balance sheets or sufficient demand to sign a PPA.

“One offtaker per project has historically been the model, and that has always worked well. But we see that we are not tapping into the full addressable market here. We’re looking at pooling volume from a number of SMEs, called a multi-buyer PPA, which then gives them access to a power hedge, additionality and all the benefits of entering into a PPA that they could previously not access.”

This brings its own challenges. A single offtaker PPA can take months to arrange, especially with clients who are new to the renewables market. Negotiation, contracting and due diligence with a group of clients all become more challenging.

However Alight is optimistic about its progress. Credit security is improved because risk is pooled across multiple companies, and according to Hernström, lenders have confirmed that the model is financeable.

Projects are growing in size to meet industrial demand. Datacentres may be able to absorb additional capacity but other clients may be looking for more limited supply arrangements. Could there be a day when multi-buyer PPAs become the norm?