Private Wire PPA
Private Wire PPA — UK Commercial Solar Explained
A private wire PPA delivers electricity directly from a generator to a consumer without crossing the public grid. Bypassing grid charges, levies, and BSUoS makes private wire one of the most cost-effective routes to renewable power.
Bypass
Grid levies
Direct
Wire to load
£0.06–£0.09
PPA £/kWh
£0.27–£0.35
Grid £/kWh
Most UK commercial solar PPAs are "sleeved" — the solar generator and the consumer share the public grid as a virtual conduit. Private wire is different: the solar generator is physically wired directly to the consumer, bypassing the grid entirely. For high-load sites with co-located land, private wire delivers the lowest-cost renewable power available in the UK.
The Private Wire Mechanic
- A solar farm or rooftop array is built on or adjacent to the consumer's site.
- A dedicated cable connects the generator directly to the consumer's electrical infrastructure.
- The consumer purchases solar electricity at a fixed PPA price (typically £0.06–£0.09/kWh).
- No grid network charges, BSUoS, or DUoS apply to the private wire flow.
- Surplus generation and shortfall demand still use the public grid normally.
Where Private Wire Works Best
- Cold storage — continuous load, often near brownfield ground-mount sites.
- Data centres — 24/7 high-load demand.
- Industrial drying / drying floors — agricultural or industrial drying.
- Manufacturing plants with adjacent land.
- Logistics campuses with multiple buildings + adjacent ground available.
- Universities and hospital campuses with internal road network and adjacent land.
Economics — Why Private Wire Wins
Compare a private-wire PPA at £0.07/kWh against grid-imported electricity at £0.30/kWh:
- Saving per kWh: £0.23
- Annual saving on a 1MWh/day site: £83,950/year
- Vs sleeved PPA: sleeved PPA at ~£0.20/kWh saves £37k/year on the same site — half as much.
Key Constraints
- Co-location required: the generator must be physically near the consumer (typically within 1–5km).
- Dedicated cable: capex for the private wire infrastructure is significant.
- Consent for the cable route: usually requires landowner consent, sometimes wayleave, occasionally planning.
- Imbalance management: private wire is not balancing-services-traded; surplus and shortfall fall on the grid.
- Long contract terms: typically 15–25 years to amortise cable + generator capex.
Regulatory Framework
Private wire is regulated under the UK Electricity Act 1989 and Ofgem's Class Exemptions framework. Under specific thresholds (typically <100MW between two private parties), no Ofgem licence is required. Above that, additional permissions may apply. Most commercial private wire deployments fall within the exempt threshold.
Why Private Wire Is Underused (And Growing)
Private wire is technically simple but commercially complex — it requires generator, consumer, and (often) landowner all to agree on long-term commercial terms. As grid electricity prices have risen, the spread between private-wire PPAs and grid prices has widened — and the commercial case has gotten stronger. Major UK industrial and data-centre operators are now actively pursuing private wire deals.
Frequently Asked Questions
What is a private wire PPA?
A private wire PPA is a commercial agreement where electricity is supplied directly from a generator to a consumer via dedicated infrastructure, bypassing the public grid. The consumer avoids most grid network charges, BSUoS, and DUoS levies.
How is private wire different from a sleeved PPA?
Sleeved PPA uses the public grid as a virtual conduit between distant generator and consumer. Private wire physically connects the two with dedicated cable. Private wire bypasses grid charges; sleeved PPA does not.
Where does private wire work best?
Sites with continuous high electrical load (cold storage, data centres, manufacturing) and adjacent land available for a generator (rooftop solar nearby, ground-mount on adjacent plot, or shared private wire across a campus).
What does a private wire PPA cost?
Typical private-wire PPA prices £0.06–£0.09 per kWh — significantly below grid prices of £0.27–£0.35/kWh. Capital cost of the dedicated cable is amortised across the PPA term (typically 15–25 years).
Is regulatory consent required?
Most commercial private wire deployments fall within Ofgem Class Exemptions (typically <100MW between two private parties). Above that, additional licensing may apply. We handle the regulatory analysis as part of project development.
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