Carbon Emission Reduction Cer

Scottish & Southern Energy PLC 25 June 2007 PURCHASE OF CARBON EMISSION REDUCTION CERTIFICATES Scottish and Southern Energy plc ('SSE'), through its subsidiary, SSE Energy Supply Ltd, has finalised the first of four agreements with GD Power Development Co. Ltd (a subsidiary of China Guodian Corporation, one of China's major energy companies) to support the development of four new wind farms in north east China. SSE Energy Supply Ltd will purchase approximately two million Carbon Emissions Reduction Certificates (CERs) over a period of five years from the start of 2008. Under the Clean Development Mechanism (CDM) established under Article 12 of the Kyoto Protocol, countries - and therefore companies - can meet their carbon emission reduction targets by purchasing CERS from CDM-approved carbon reduction projects in the developing world. This is the first time that SSE has directly acquired primary CERs from a project. Each of the four wind farms is expected to have an installed capacity of around 50MW and will displace carbon emissions from coal-fired power stations in the region, leading to around two million tonnes of carbon dioxide being avoided. The construction of the first of the wind farms, GD Xingcheng Haibin is already under way and the last of them is expected to be commissioned during 2008. In May 2007, SSE announced that it has set itself a target to reduce by 20% over 10 years to 2016 the amount of carbon dioxide per kilowatt hour of electricity produced at power stations in which it has an ownership or contractual interest. It said its target would include CERs from specific generation projects under the CDM, but would exclude those which are not related to a specific generation project. In March 2007, the UK government published its Approved National Allocation Plan for Phase II of the EU Emissions Trading Scheme, from 2008 to 2012. Across its generation portfolio (taking account of contractual shares), SSE will receive an allocation of 16.3 million tonnes per annum, compared with 19.6 million tonnes per annum in Phase 1. SSE's Phase II allocation as a percentage of its Phase I allocation is around 83%, compared with around 80% across the electricity sector as a whole. The agreements were brokered by Tradition Financial Services (TFS) in London and Easy Carbon in Beijing and are expected to be finalised in July. All agreements are subject to approvals by the Executive Board of the United Nations Framework Convention on Climate Change (UNFCC). Ian Marchant, Chief Executive of SSE, said: 'Climate change is literally a global challenge and supporting the development of clean sources of energy anywhere in the world is a key means of addressing it. We have deliberately acquired CERs which relate to a mature electricity generation technology which we have experience of operating, because we want to be sure that they are making a real difference. 'The large majority of our investment in reducing carbon emissions will continue to be in the UK, but CERs are an effective means of supplementing it.' Enquiries to: Scottish and Southern Energy plc Justyn Smith - Head of Media Relations + 44 (0)845 0760 530 Sharron Miller-Mckenzie - Press Office Manager + 44 (0)845 0760 530 This information is provided by RNS The company news service from the London Stock Exchange

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