The United Kingdom’s corporate renewable energy market continues to mature at pace, with major businesses increasingly turning to long-term Power Purchase Agreements (PPAs) as a mechanism for securing sustainable energy supplies, managing price volatility and advancing decarbonisation objectives. Against this backdrop, global law firm Baker McKenzie has successfully advised Virgin Media O2 on a significant new 10-year solar energy Power Purchase Agreement with egg Power, marking another important chapter in the telecommunications giant’s ambitious net zero journey.

The transaction represents far more than a conventional energy supply arrangement. It demonstrates the growing sophistication of corporate renewable procurement strategies, the increasing importance of legal expertise in navigating complex energy transactions, and the critical role PPAs are playing in supporting the UK’s wider transition towards a low-carbon economy.

The Agreement at a Glance

Under the terms of the long-term agreement, egg Power will supply Virgin Media O2 with renewable solar electricity generated from a new 49.9MW solar farm located in Suffolk.

The project is expected to become operational in 2027 and will contribute approximately five per cent of Virgin Media O2’s overall electricity requirements. While this figure may appear modest in isolation, its significance becomes more apparent when considered within the broader framework of the company’s renewable energy strategy.

This latest agreement follows Virgin Media O2’s previously announced wind energy Power Purchase Agreements secured in 2025. When combined, the solar and wind arrangements are expected to supply around twenty per cent of the telecommunications provider’s total energy demand through dedicated long-term renewable generation assets.

The agreement therefore represents a substantial commitment to clean energy procurement while simultaneously providing enhanced certainty over future electricity costs in an increasingly volatile energy marketplace.

Baker McKenzie’s Role in Delivering the Transaction

The successful execution of a long-term renewable energy PPA requires careful legal structuring, comprehensive risk allocation and meticulous contractual negotiation.

Baker McKenzie acted as legal adviser to Virgin Media O2 throughout the transaction, deploying its market-leading expertise in energy, infrastructure and sustainability-focused projects.

The firm’s team was led by Energy & Infrastructure Partner James Wyatt alongside Associate Alex Tam. They were supported by Consultant Andrew Hedges and Trainee Solicitor Kayan Sayeed, reflecting a collaborative and multidisciplinary approach to managing a transaction of strategic importance.

The deal further reinforces Baker McKenzie’s established reputation within the energy transition sector, particularly in advising major corporates on renewable energy procurement, infrastructure development and decarbonisation-focused investments.

The Rise of Corporate Power Purchase Agreements in the United Kingdom

Corporate PPAs have emerged as one of the most effective legal and commercial instruments available to businesses seeking to reduce carbon emissions while securing predictable long-term energy costs.

Unlike traditional energy procurement arrangements, PPAs establish direct commercial relationships between renewable energy generators and large energy consumers. Such agreements typically extend over periods ranging from ten to twenty years, creating certainty for both parties.

For renewable energy developers, PPAs provide stable and predictable revenue streams that can facilitate project financing and investment decisions.

For corporate purchasers, PPAs deliver several strategic advantages, including:

Long-Term Cost Certainty

Energy market volatility has become a defining feature of the global economic landscape. Long-term PPAs can provide greater pricing predictability and help businesses manage exposure to fluctuating wholesale electricity markets.

Enhanced ESG Performance

Investors, regulators and consumers increasingly expect businesses to demonstrate meaningful progress towards environmental objectives. PPAs enable organisations to procure renewable electricity directly from newly developed generation assets, creating measurable sustainability outcomes.

Additionality and Renewable Energy Development

One of the most significant benefits of modern PPAs lies in their ability to support the development of new renewable energy infrastructure. By providing guaranteed demand, corporate purchasers can play a direct role in bringing new renewable projects to market.

Regulatory Alignment

As climate-related disclosure requirements continue to evolve, renewable procurement strategies such as PPAs are becoming increasingly relevant within broader compliance and governance frameworks.

Supporting Virgin Media O2’s Net Zero Ambitions

The agreement forms a key component of Virgin Media O2’s broader sustainability strategy, known as the Better Connections Plan.

Central to that strategy is the company’s commitment to achieving net zero carbon emissions across its entire value chain by the end of 2040.

Achieving net zero within a telecommunications business presents unique challenges. Telecommunications operators maintain extensive network infrastructure, data centres, transmission equipment and operational facilities, all of which require substantial and continuous energy consumption.

Consequently, securing reliable renewable energy supplies is not merely an environmental consideration; it is also a critical operational and commercial priority.

The Suffolk solar project will support Virgin Media O2’s objective of ensuring that sites under its operational control are powered exclusively by renewable energy, while simultaneously strengthening the resilience and sustainability of its national telecommunications network.

Renewable Energy and the Telecommunications Sector

The telecommunications sector is rapidly becoming one of the most energy-intensive components of the modern digital economy.

The growth of cloud computing, data-intensive applications, streaming services, artificial intelligence technologies and next-generation connectivity infrastructure is driving unprecedented increases in electricity demand.

Against this backdrop, renewable energy procurement is increasingly viewed as a strategic necessity rather than a discretionary sustainability initiative.

Virgin Media O2’s latest agreement demonstrates how telecommunications providers are proactively addressing this challenge through long-term energy partnerships that align environmental objectives with operational requirements.

The transaction may also serve as a model for other major network operators seeking to balance sustainability commitments with commercial realities.

The Strategic Importance of egg Power

The agreement also highlights the growing role of specialised renewable energy suppliers in facilitating the UK’s energy transition.

As part of Liberty Growth, Liberty Global’s investment platform focused on scalable technology, infrastructure and digital innovation, egg Power occupies a unique position within the renewable energy market.

The company has specifically targeted the growing demand for clean energy among telecommunications operators, digital infrastructure providers and other large-scale energy consumers.

This strategic focus is particularly relevant as emerging technologies, including artificial intelligence and advanced data processing, drive significant increases in electricity consumption across multiple sectors.

By developing dedicated renewable generation assets and offering long-term supply arrangements, egg Power is positioning itself as a critical partner for organisations seeking sustainable and reliable energy solutions.

Legal Complexity Behind Modern Renewable Energy Transactions

Although corporate PPAs are increasingly common, they remain highly complex legal arrangements requiring specialist expertise.

Key legal considerations typically include:

Contractual Risk Allocation

Parties must carefully negotiate risks associated with energy generation, supply interruptions, forecasting inaccuracies and market fluctuations.

Regulatory Compliance

Renewable energy transactions must comply with an evolving framework of UK energy regulations, environmental obligations and market rules.

Pricing Structures

Sophisticated pricing mechanisms are often required to balance commercial certainty with market responsiveness.

Project Development Risks

Parties must address construction timelines, operational performance standards and potential delays in project delivery.

Sustainability Verification

Robust contractual provisions are required to ensure that renewable energy claims can be substantiated and audited in accordance with recognised standards.

The successful completion of the Virgin Media O2 and egg Power agreement demonstrates the importance of experienced legal advisers capable of navigating these multifaceted issues.

Recognition of Sustainability Leadership

The agreement comes at a time when Virgin Media O2 continues to receive external recognition for its environmental and sustainability performance.

The company recently achieved an ‘A’ rating in the CDP Supplier Engagement Assessment for the 2024 disclosure cycle, reflecting strong performance in climate-related supplier engagement.

Additionally, Virgin Media O2 received a Bronze Medal from EcoVadis, recognising its overall sustainability achievements and commitment to responsible business practices.

These accolades provide further evidence that the organisation’s renewable energy procurement strategy forms part of a broader and demonstrable commitment to environmental stewardship.

The Future of Corporate Renewable Energy Procurement

The Virgin Media O2 and egg Power agreement illustrates a broader trend reshaping the UK’s energy landscape.

Corporate demand for renewable electricity is expected to continue expanding as organisations seek to meet increasingly ambitious sustainability targets, manage energy costs and satisfy stakeholder expectations.

Power Purchase Agreements are likely to remain a central feature of this transition, enabling businesses to support new renewable generation while enhancing operational resilience and environmental performance.

For legal advisers, energy developers and corporate purchasers alike, the transaction represents another example of how sophisticated contractual frameworks can facilitate meaningful progress towards net zero objectives.

Release Conclusion

Baker McKenzie’s advice to Virgin Media O2 on its 10-year solar Power Purchase Agreement with egg Power underscores the growing importance of legal expertise in delivering complex renewable energy transactions.

The agreement not only strengthens Virgin Media O2’s long-term renewable energy portfolio but also reinforces its commitment to achieving net zero carbon emissions by 2040. Combined with previous wind energy arrangements, the transaction positions the company as a significant participant in the UK’s clean energy transition.

As corporate sustainability ambitions continue to accelerate and energy markets evolve, transactions of this nature are likely to become increasingly prominent. They offer a compelling example of how legal innovation, commercial strategy and environmental responsibility can converge to support both business objectives and national decarbonisation goals.

For Baker McKenzie, the deal further highlights its role at the forefront of advising on the legal frameworks that are helping shape the future of sustainable energy procurement in the United Kingdom and beyond.