Update on Power Stations

Scottish & Southern Energy PLC
16 November 2005


Scottish and Southern Energy plc


16 November 2005
Nr-5278


SSE TO OPT POWER STATIONS IN TO LARGE COMBUSTION PLANT DIRECTIVE (LCPD)


Scottish and Southern Energy plc ('SSE') plans to opt in to the Large Combustion
Plant Directive (LCPD) all of the capacity at its 2000MW Fiddler's Ferry power
station in Cheshire and half of the capacity at its 2000MW Ferrybridge power
station in South Yorkshire.

To do this will require the installation of Flue Gas Desulphurisation (FGD) and
an investment estimated to be around £225m.  This is in addition to SSE's
existing investment in the development of additional facilities at the stations
to increase their ability to 'co-fire' fuels from renewable sources.

Lurgi (UK) Ltd has been appointed preferred bidder for the FGD installation
work.  Preliminary work has already started and is expected to be completed in
time for the power stations to generate electricity through a 'de-sulphurised'
process in the first half of 2008.

SSE acquired the Ferrybridge and Fiddler's Ferry power stations and associated
coal stocks, which have a total capacity of 4,000MW, from AEP Energy Services UK
Ltd for £136m in July 2004.

Opting capacity at the two stations in to the LCPD means that, following the
installation of the FGD equipment, restrictions on their ability to generate
electricity between 2008 and 2015 will be lifted and they will be able to remain
open after 2015.

The stations had been opted out of the LCPD by previous owners, which meant they
were scheduled for full closure by 2015.  The electricity which the stations
currently generate meets around five per cent of the demand for power in Great
Britain in a typical year.  Extending their lives beyond 2015 will, therefore,
add significantly to the long-term security of the country's electricity supply.

The decision to install FGD also represents a potential opportunity for UK
deep-mined coal to help meet fuel requirements and SSE will explore this
opportunity with UK coal producers.

FGD equipment is designed and operated as a chemical absorption process.
Injection of a limestone slurry removes at least 94 per cent of the sulphur
dioxide, one of the main causes of acid rain, and produces gypsum, which is a
saleable product.

In addition, SSE intends to develop new rail facilities at Fiddler's Ferry to
improve the process for delivering coal and limestone to, and handling coal at,
the station. This is part of a wider review of the operational logistics at both
stations.

SSE Chief Executive Ian Marchant said: 'When we acquired our coal-fired
generation plant a year ago, we said we would examine all options for maximising
the long-term value of the assets, and we are already investing around £20m in
developing additional facilities to increase further their ability to co-fire
fuels from renewable sources.

'We believe that installing FGD represents a good investment opportunity and a
step forward in environmental terms. It will also extend the contribution of our
coal-fired plant to the security of the UK's energy supplies and means that we
will continue to have the country's most diverse generation portfolio, with all
the advantages that brings.'



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Alan Young and Julian Reeves



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