Completion of Agreements

Scottish & Southern Energy PLC
21 December 2006



SCOTTISH AND SOUTHERN ENERGY PLC

COMPLETION OF AGREEMENTS ON MARCHWOOD POWER LTD


Scottish and Southern Energy plc ('SSE') and ESBI (Ireland's ESB International)
have completed all of the financial and legal agreements in respect of their 50:
50 joint venture, Marchwood Power Ltd. This will allow construction work on the
venture's new 840MW combined cycle gas turbine (CCGT) power plant in Southampton
to begin early in 2007. The plant is expected to be constructed and in
commercial operation in time for the winter of 2009/10.


On completion, it will take SSE's ownership interest in gas-fired power stations
to almost 4,800MW and in electricity generation capacity as a whole to almost
10,500MW.


Under the agreements, the plant will be operated by Marchwood Power Ltd, which
will be responsible for ensuring it is available to generate electricity as
required by its customer, SSE. SSE will supply the gas for conversion into
electricity at the plant, and the net carbon emissions allowances, and will sell
the resulting output into the UK electricity market. In this respect, the
arrangements are similar to those which apply to Seabank Power Limited, in which
SSE also has a 50% stake, and which operates a 1,140MW CCGT power station near
Bristol


The plant will be built under a fixed price turnkey contract by Siemens plc,
using gas turbines similar to those used at Seabank and at SSE's Peterhead Power
Station. It will have one of the highest thermal efficiencies in the UK and in a
typical year will meet the electricity requirements of around one million homes.


The expected capital cost for Marchwood Power Ltd is around £400m. It will be
financed on a debt/equity ratio of 80:20. SSE's equity investment in the venture
will, therefore, be around £40m. SSE will also provide 50% of the project debt
requirements (other than the VAT and Working Capital facilities) as a lender.


The favourable location of the plant, on the coast of central southern England,
means it will actually receive payments under the current arrangements for
charging electricity generators for use of the electricity networks.


Ian Marchant, Chief Executive of SSE, said:


'Significant investment in UK electricity generating capacity will be required
during the next 10-15 years to replace existing plant that is scheduled for
closure and to maintain an acceptable margin over expected energy electricity
demand. Marchwood is, therefore, a very important project for not just SSE and
ESBI, but the UK as a whole.


'Its development, allied to our other investments in coal-fired power stations
and in renewable energy, will help to maintain SSE's position as the electricity
generator with the most diverse and flexible portfolio of assets in the UK.'



Press Office Contact: 0870 900 0410
Alan Young and Sharron Miller McKenzie




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