A private wire is sometimes referred to as a ‘Behind the Meter (BtM) PPA

This model can be enacted by local authorities as follows:

• Local authority designs, builds and commissions solar generation asset on/ near building.
• Capital and operating costs are recovered through a PPA with a third-party offtaker (most likely a tenant in a local authority owned building but this does not always have to be the case).
• The third-party offtaker pays for any grid imported electricity through their existing supply contract.
• The local authority may generate additional revenue from surplus solar export.
• This will require an additional export arrangement with a balancing responsible party.

• A private wire is where a generator connects directly to a building or site, replacing any power they would have imported
• A private wire is not subject to the same regulation and charges (e.g. use of system or policy charges) that standard exported electricity would face
• This is highly valuable for both parties depending on the cost of setting up the private wire:
  • For the off-taker, they will have to import electricity as normal when there is not any power available from the private wire
  • For the generator, anytime there is not sufficient demand from the off-taker, the excess power will be exported onto the grid which requires separate commercial

Key Benefits

Financial and CO₂

• Decrease in energy bills for off- taker
• Uplift in price for generator
• Reduces carbon emissions for off- taker through reduced import from grid

Other Benefits

• Long-term price security for generator and off-taker
• Local skills and jobs
• Can be expanded with additional capacity at good site locations

Risks and Considerations

• Complex to deliver
• Requires suitable locations and demand close to generator
• “Optimism bias” – can suffer from poor initial cost estimates and spiralling costs
• Value from avoided system and policy costs likely to be removed in future
• Very difficult to find sites of sufficient size next to an off- taker
• Cost of setting up the private wire