INTERVIEW: Island Green Power considering evolution into IPP
Pureplay developer Island Green Power (IGP) is considering a shift to become an IPP, new company CEO Bob Psaradellis told NPM Europe in a recent interview.
“Whether we transition ourselves to an IPP or not, it’s a question that we have to analyse and answer,” says Psaradellis. “We're very seriously considering having the ability to oversee construction and provide asset management.”
Taking on the CEO position in May 2024, Psaradellis was previously the founder and CEO of Renewable Power Capital, a renewable IPP that he helped build from scratch into a fully integrated IPP in less than two years. His background would put Island Green Power in a good position to make the change.
Through IGP’s business plan process, which runs until the end of the year, the company is analysing its business model to consider the addition of construction management and asset management capabilities as part of this potential shift.
Psaradellis expects the company will make a decision on this front by early next year, but in the mean time it has already taken steps to bolster its commercial capabilities.
“We now have an emerging capability to structure offtake and financing for projects, which we think makes it easier to bring financial investment partners into those projects,” says Psaradellis.
Towards its commercial aspirations, Tomas Tuominen joined IGP two weeks ago as chief commercial officer. “He’s building out a team that will be focused on commercialisation in part,” Psaradellis notes.
Through the experience of people now in the business, one specific commercial area Psaradellis expects IGP to begin to showcase increasingly is its ability to secure and structure different kinds of offtake.
It is exploring offtake for its European projects, as well as projects in the nascent market of New Zealand, which has so far seen few PPAs.
It’s in the early stages of discussions, but a number are ongoing.
However, Psaradellis did note that structuring offtake in Spain is currently challenging, with more supply than there is demand making pricing very tight. Meanwhile in Italy, government incentives pose a more favorable option to less advanced PPAs.
In the UK, PPAs have hard competition against the government’s CfD scheme, which offer an attractive alternative of longer contracts and inflation indexing, Psaradellis notes.
Pipeline update
As Island Green Power continues as a developer, Psaradellis says its focusses are “secure grid, secure land, and then secure planning consent. Once we've secured planning consent then our attention shifts to fulfilling the planning conditions and deciding what is going to be the construction solution, both in terms of the capital and technical partners that we bring in,” says Psaradellis.
It is currently actively seeking equity partners in Australia, New Zealand, and Spain, with discussions ongoing. Psaradellis declined to disclose the partners that the company is considering.
Meanwhile in the UK, two projects recently achieved core development milestones and are progressing toward the ready-to-build stage.
The Cottam project, a 600 MW solar project with a 600 MW co-located battery, recently received planning permission. Carlton solar farm, a 50 MW PV plus 60 MW battery project IGP is developing through Carlton Solar Farm Limited was announced as a winner in the UK’s sixth CfD allocation round.
Before a search for equity partners begins, IGP is completing internal planning. “Mainly that’s around looking at and understanding the planning conditions with respect to Cottam. With respect to Carlton – as I mentioned it’s a 50 MW solar project and has 60 MW battery – we’re looking at ways to optimise the grid connection between those two technologies,” says Psaradellis.
In this regard, Psaradellis highlights that IGP has been operating in the UK since 2013. “We have got as much experience and capability as anybody in the UK in terms of development here, and we're quite comfortable with the process,” he says.
Its UK pipeline is by far its largest, accounting for 19 GW of secured grid connections while the figure is 21 GW for IGP’s global projects.
Grid connection struggles
While IGP is evidently successful with regards to securing grid, particularly reflected by its UK pipeline, Psaradellis highlights that grid queues within the UK and other countries continue to pose a challenge.
“You have to contend with very long grid queues,” Psaradellis says, adding that IGP welcomes the ongoing UK grid consultation which aims to remove so-called grid squatters from the queue.
“There's a meaningful number of developers that have projects that have secured grid but for one reason or another don't have the capital or the capabilities, or both, to take those projects forward.”
The UK consultation could lead to strategies that remove artificial congestion from the queue such as requiring projects to have secured land within a specified timeframe.
“More emphasis put on land, we think that that's a good metric to kind of separate the wheat from the chaff in terms of who has real projects and who doesn't,” Psaradellis concludes.
*This story was originally published exclusively for NPM Europe subscribers.
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