Private wire
A direct cable between generator and consumer, bypassing the public distribution network. Because the power never uses the network, it avoids distribution and transmission charges and much of the policy cost loaded onto supplied units. On a site with adjacent generation, that difference is large enough to be the entire business case.
The constraints are physical and contractual. You need land, a route for the cable, wayleaves where it crosses third party ground, and a generator willing to build against your covenant. You are also tied to that site for the life of the asset, typically fifteen to twenty five years, which is a long time to promise you will still be manufacturing in the same building.
Sleeved PPA
Generation sits anywhere on the network. A licensed supplier takes the output, matches it against your consumption in every settlement period, delivers to your meters and supplies the shortfall. You pay the contracted price for matched volume, a sleeving fee for the service, and a top-up rate for everything else.
It is available to any site with a licensed supply, which is to say all of them. It is portable across a portfolio. And it puts an experienced counterparty between you and the imbalance risk.
The cost is that you are paying network and policy charges on the delivered units, plus the sleeving fee, so the headline saving is smaller. The negotiation moves onto the fee, the top-up price and what happens to excess generation.
Choosing
Run the test in this order.
- Is there generation, or land for generation, physically adjacent? If not, private wire is off the table and the question answers itself.
- Will you occupy the site for the term? A fifteen year commitment on a leasehold with eight years left is not a commitment.
- Does your load shape suit the generation? A single asset on private wire supplies what it supplies, when it supplies it. Everything else comes from your supplier at whatever they charge.
- Is one site the whole problem, or do you have twelve? Private wire solves one. Sleeving, or a virtual structure, solves the estate.
Plenty of sites end up doing both: on-site or private wire generation covering a slice of the load, and a sleeved contract handling the rest. That is not a compromise, it is usually the right answer.