Acquisition of Generation Assets Completed

RNS Number : 3118O

SSE PLC

09 October 2012

 



ACQUISITION OF ELECTRICITY GENERATION ASSETS COMPLETED

SSE plc, through its wholly-owned subsidiary SSE Generation Ltd., has today completed the acquisition announced in June 2012 of Endesa Ireland Ltd from Endesa Generacion SA for a total cash consideration of €308m (£246m) plus an estimated €53m (£42m) for working capital. In addition to the transaction amount, SSE expects to incur a further €137m (£110m) to complete a 460MW CCGT (combined cycle gas turbine) currently under construction at Great Island, Co. Wexford.

This includes a deferred element of up to €10m (£8m) which will be paid on completion of an upgrade to the grid at the Great Island CCGT site.

Adding to SSE's existing assets, this acquisition is a positive step forward in delivering a balanced generation and supply business in Ireland. As stated in June, itscompletion makes SSE the third largest generation capacity owner in the all-island Single Electricity Market (SEM) with 1,568MW (around 13% of installed capacity) in operation including 500MW of wind farm capacity to help meet the energy needs of SSE's over 750,000 energy supply customers in Ireland.

Generation assets in operation

The assets which have been acquired include four thermal generation plant in operation in Ireland with a total combined generating capacity of 1,068MW. The principal function of each of the operational sites is to help maintain security of electricity supply in the all-island SEM by being available to respond to peaks in demand. The electricity generated is traded in the SEM, where fixed capital costs and plant availability are remunerated via a capacity payment mechanism, and variable costs, including fuel and carbon, are remunerated through the energy market.

CCGT under construction

A 460MW CCGT (combined cycle gas turbine) is currently under construction at Great Island, Co. Wexford, and is expected to be commissioned in 2014, at which time the existing 240MW fuel oil unit will be decommissioned, significantly reducing carbon emissions in Ireland. The modern and efficient gas-fired power plant will utilise Mitsubishi Heavy Industries' proven CCGT technology and will feature a 460MW Mitsubishi generation plant. The CCGT energy project has consents for gas and grid connections. 

Over the medium and long term, the completion of the 460MW CCGT at Great Island and the continuing development of its wind farm projects will give SSE a balanced generation portfolio in Ireland and a significantly increased output of electricity that will have a lower CO₂ intensity than the SEM average.  In a typical year, the Great Island CCGT and SSE's existing wind farms should generate the equivalent of around two thirds of the electricity needed to supply SSE's customers in Ireland (based on electricity consumption for the financial year ending 31 March 2012).

CCGT with consent for development and other options

The acquisition includes further options for the future development of electricity generation plant in Ireland, including a proposed 450MW CCGT plant at Tarbert, Co. Kerry, which has full planning permission, and two brownfield development sites.

Paul Smith, SSE Managing Director of Generation, said:

"We are delighted to announce the completion of the acquisition of Endesa Ireland Ltd. This investment in Ireland is in line with our long term commitment towards generating energy from low carbon sources including new flexible CCGT generation and brings to around €1.7bn the total investment SSE has made into the Irish energy market.

"This acquisition, which makes SSE the third largest energy company across the island of Ireland, gives us substantial and diverse generation assets to securely and cost-effectively meet the energy demand of our rapidly growing Irish supply business, Airtricity, in a way that is sustainable for the long term. 

"Our priority now and over the next few years is to work with the new staff joining the SSE family to build on the opportunities that this acquisition presents including the construction of what will be Ireland's newest and most efficient CCGT power station at Great Island."

 

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