Disposal

RNS Number : 2162H

Scottish & Southern Energy PLC

31 October 2008

 



SCOTTISH AND SOUTHERN ENERGY PLC

DISPOSAL OF EQUITY AND REIMBURSEMENT OF CAPITAL COSTS IN GREATER GABBARD OFFSHORE WINDS LIMITED

Scottish and Southern Energy plc ('SSE') has agreed to sell 50% of the equity in Greater Gabbard Offshore Winds Limited ('GGOWL') to npower renewables, the UK fully owned subsidiary of RWE Innogy. RWE Innogy will also reimburse SSE for 50% of the capital costs already incurred in developing the project. The total cash consideration of the transaction is £308 million. 

GGOWL was originally established as a 50:50 joint venture partnership between Airtricity, acquired by SSE in February 2008, and Fluor International Limited. It was created specifically to develop the Greater Gabbard Offshore wind farm in the outer Thames Estuary, which, on completion, will become the world's largest offshore wind farm.  In May 2008, SSE acquired Fluor's 50% stake, while stating its intention to dispose of it later in the year.

SSE will act as the operator of the project under a management services agreement with GGOWL.  This will continue for both the construction and operational phases.

Onshore work on the construction of the wind farm is now under way, and offshore work is on track to begin in the middle of 2009. It will be commissioned in two phases, with the first phase generating electricity from 2010 and the entire construction scheduled to be completed in 2011.  

On completion, the wind farm will have a total capacity of around 500MW, with 140 turbines mounted on steel monopiles and transition pieces, in water depths between 24 and 34 metres. It is expected to have a load factor of over 40%, based on site-specific met mast data collected since 2005, and SSE will take 50% of the output.

The development of Greater Gabbard, excluding the connection to the electricity grid, is expected to require investment of around £1.3bn.

Ian Marchant, Chief Executive of SSE, said: 'This year has been characterised by high and volatile prices for fossil fuels and by political uncertainty in key oil and gas producing regions. All of this again demonstrates the long-term value of energy sources which are both renewable and indigenous, and of our acquisition of Airtricity earlier this year.

'I am pleased that RWE Innogy will be our partner in this joint venture. Its long-standing interest and participation in offshore wind farm developments will complement our own expertise in the development of major renewable energy projects.

'Greater Gabbard is a major development in every sense, and its significance is underlined by RWE Innogy's investment in it. Our priority is to make sure construction work proceeds in an efficient and timely manner, so that it can begin to play its important part in meeting the UK's energy needs as soon as possible.'  

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Notes to Editors:

• SSE entered its closed period on 1 October 2008, in advance of its Interim Results announcement on 12 November 2008.  It will be able to provide further information on this transaction in the Interim Results statement.

• SSE announced its intention to progress with the development of Greater Gabbard on 14 May 2008. The full announcement is available in the media centre at www.scottish-southern.co.uk

Contact:

Justyn Smith or Alan Young - 0845 0760 530

 

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