Open call for evidence: Corporate Power Purchase Agreements 

Equilibrion (Eq.flight) Response to the UK Government’s 2026 Call for Evidence 

1. How attractive are CPPAs vs other supply arrangements (by type) 

As a UK SAF producer developing new capacity in response to the UK SAF mandate, long-term electricity supply is a foundational input to our project viability. 

SAF production is electricity intensive. Power pricing and stability directly affect: 

• Capital investment decisions for our SAF plant; 

• Financing structures; 

• Long-term aviation fuel pricing; 

• Competitiveness against imported fuels. 

Corporate PPAs are, in principle, an attractive mechanism to secure long-term low-carbon electricity and provide price certainty. However, in practice, the current CPPA market disproportionately serves large corporates. Emerging industrial producers, including SAF developers responding to government mandates, face structural barriers, particularly around credit requirements. 

In addition, the current market design does not sufficiently recognise the broader economic value associated with industrial offtakers. Projects such as UK SAF production deliver strategic benefits beyond electricity consumption, including high-skilled industrial employment, regional investment in challenging economic areas, domestic supply chain development, and strengthened energy and fuel security. These wider economic contributions are not reflected in CPPA allocation outcomes, which currently favour the strongest balance sheets rather than the greatest strategic value to the UK. 

Without targeted action, the CPPA market risks allocating scarce long-term low-carbon supply primarily to the strongest balance sheets, rather than to projects delivering UK industrial decarbonisation objectives. 

Where government has mandated SAF blending volumes, it has a direct interest in ensuring that domestic producers can access long-term, competitively priced clean electricity to meet those obligations. Ensuring that CPPA policy supports industrial producers as well as large corporate buyers would better align energy market mechanisms with the UK’s industrial strategy and regional growth objectives. 

Q2. Can CPPAs support new generation capacity? 

CPPAs can support new generation where revenue certainty is sufficient to unlock financing. However, this is highly dependent on the perceived credit strength of the offtaker. Projects backed by large multinational technology firms are easier to finance than projects in emerging industrial sectors. This creates a misalignment between: 

• Government’s industrial and decarbonisation mandates (including SAF), and 

• The current operation of the CPPA market. 

We also emphasise that CPPAs should not be implicitly limited to variable renewable generation which is currently implied. For electricity-intensive industrial processes such as SAF production, firm low-carbon power including nuclear, is particularly well suited. 

Nuclear generation offers: 

• Predictable, continuous output; 

• Alignment with baseload industrial demand; 

• Reduced grid balancing complexity and cost. 

Explicit inclusion of nuclear within CPPA policy would expand supply options for industrial users and improve overall system efficiency. To enable nuclear projects to proceed while reserving output for private offtake, thus supporting UK strategic industrial objectives, Government should consider a structured revenue floor or “backstop” mechanism that: 

• Supports financing during development; 

• Encourages full output to be contracted via private PPAs; 

• Activates only in downside scenarios. 

Such an approach could materially reduce fiscal exposure relative to traditional CfDs, while enabling greater industrial participation. 

Q3. What actions could government take to support CPPA growth? 

From the perspective of a SAF producer delivering policy-mandated decarbonisation outcomes, the following measures are necessary to ensure equitable access to CPPAs: 

1. Introduce a targeted partial credit guarantee for strategic industrial offtakers 

The principal barrier for emerging industrial projects is counterparty credit risk. A government-backed partial guarantee scheme, covering a defined portion of default risk and priced on a risk-adjusted basis, would: 

• Reduce financing barriers for generators; 

• Lower transaction risk; 

• Enable industrial projects aligned with UK mandates to effectively compete for long-term supply. 

This would not constitute an open-ended subsidy. Properly structured, such a scheme could operate with limited fiscal exposure while unlocking significant private capital. 

Absent such intervention, CPPA markets will naturally prioritise the strongest credit profiles, potentially crowding out strategically important domestic industries. 

2. Explicitly confirm technology neutrality, including nuclear 

CPPA policy should explicitly apply to all forms of low-carbon generation, including nuclear. For SAF production and other electricity-intensive industrial processes, access to firm, stable supply materially reduces operational and financial risk. Excluding or implicitly deprioritising nuclear within CPPA frameworks would unnecessarily constrain industrial access to suitable generation sources. Not including nuclear equitably with other low-carbon generating technologies would be in direct opposed to wider Government policy including: 

1. Energy Act 2023, which formally set ‘nuclear-derived fuels’ into primary legislation and defined fuels produced with nuclear energy inputs as ‘Renewable Fuels of Non-Biological Origin. This defined nuclear-derived fuels as equivalent in policy to fuels derived from renewable energy inputs; 

2. SAF Mandate, which as a consequence of the Energy Act 2023 includes nuclear-derived electricity and heat as feedstock inputs to SAF production that have equivalence to renewable energy feedstock. This is mirrored in the proposed SAF Revenue Certainty Mechanism; 

3. Hydrogen strategy, which defined hydrogen produced from nuclear energy inputs as ‘electrolytic’ and therefore in the same category in policy as hydrogen produced from renewable generating assets. 

Introducing a disparity between nuclear and renewable energy generators in the CPPA would materially fail pre-existing primary legislation and enormously compromise the deliverability of a wide range of directly-related Government policies. This is counter to the clear and documented intent of those policies. If the CPPA is not technology neutral, including in respect of nuclear, then there are likely to be far-reaching consequences across the policy landscape requiring major changes to pre-existing policies and mandates. 

Furthermore, power-to-liquids SAF production must demonstrate ‘additionality’ whereby the most preferential production must use input electricity from generating capacity that was installed specifically for the purpose of SAF production. For this to be the proven requires the SAF producer, to be a participant in the development of the electricity generator and there are limited means of proving this was the case. A CPPA is a critical evidential element in this chain and so ensuring that all electricity generating technologies are considered equitably in the CPPA is exceptionally important if decarbonisation goals are to be achieved. 

The recently published Advanced Nuclear Framework sets out Government’s ambition to enable privately led advanced and modular nuclear deployment as part of the UK’s long-term decarbonisation and industrial growth strategy. A core element of that ambition is the use of advanced nuclear technologies not only for electricity generation, but also for the direct decarbonisation of industry through high-grade nuclear heat and co-location within industrial clusters. This has clear relevance for energy-intensive sectors such as Sustainable Aviation Fuel production, where both reliable electricity and, potentially, clean process heat are critical inputs. 

For the Advanced Nuclear Framework policy to succeed, there must be viable commercial routes for industrial users to contract with new nuclear projects, whether through long-term CPPAs, private wire arrangements, or co-located heat and power agreements. Consistency between nuclear policy and CPPA market design is therefore essential. If CPPAs are implicitly structured around variable renewable generation alone, they risk constraining industrial access to firm low-carbon supply and limiting the commercial viability of advanced nuclear projects intended to serve industrial clusters. Explicit recognition of nuclear, including its role in providing high-grade industrial heat, would better align electricity market policy with the Government’s strategy to decarbonise industry, strengthen regional economies, and support high-skilled employment. 

Ensuring that industrial users can secure long-term nuclear power through CPPAs is not a technology preference; it is a necessary step to deliver policy coherence across the UK’s energy and industrial strategy. 

3. Support aggregation, clustering and private wire models 

Government should facilitate: 

• Aggregation mechanisms enabling multiple industrial buyers to contract collectively through a CPPA model; 

• Clear regulatory pathways for private wire arrangements; 

• Industrial cluster models co-located with low-carbon generation, including new nuclear capacity. 

These structures can materially improve bankability and reduce transaction costs for emerging sectors. 

4. Reduce transaction complexity 

Standardised CPPA clauses, greater transparency on sleeving and balancing arrangements, and guidance for first-time industrial buyers would reduce friction in the market and accelerate participation. 

Q4. What best practice from other markets should GB consider? 

Several European jurisdictions have implemented partial state-backed guarantee schemes to address counterparty risk in CPPAs supporting new build generation. Adapting this model to the UK context,  with eligibility linked to projects delivering strategic industrial outcomes, including SAF production, would better align energy market policy with industrial strategy. 

Where government mandates SAF volumes and promotes domestic production capacity, ensuring that producers can secure long-term clean power is foundational to delivery. 

Without structural adjustments to the CPPA framework, emerging industrial sectors risk being structurally disadvantaged relative to large multinational corporates with stronger credit ratings. 

Summary 

The strategic value of advanced nuclear extends beyond decarbonisation. By providing firm electricity and high-grade industrial heat within co-located clusters, nuclear can underpin the long-term competitiveness of UK manufacturing. 

Ensuring that UK industrial users can secure long-term, competitively priced contracts with new nuclear projects is therefore central to rebuilding domestic industrial capacity. Without such access, energy-intensive sectors such as SAF risk structural disadvantage relative to global competitors and large multinational buyers. Aligning CPPA policy with the Advanced Nuclear Framework and pre-existing wider policy and mandates is essential if the UK is to translate policy and mandate commitments, and synergistic nuclear deployments, into tangible industrial growth, skilled employment, and regional economic regeneration.