Development of Electricity Ge

RNS Number : 6138S

Scottish & Southern Energy PLC

21 May 2009

 



SCOTTISH AND SOUTHERN ENERGY PLC

DEVELOPMENT OF ELECTRICITY GENERATION PORTFOLIO

Scottish and Southern Energy plc ('SSE') has reached three significant milestones in the development of its electricity generation portfolio. These developments will help keep SSE on track for its target of a 50% reduction in the carbon intensity of its generating activities between 2006 and 2020 as well as underlining its position of having the most diverse portfolio of generating plant in the UK.

SSE has:

• agreed to acquire Abernedd Power Company Limited ('Abernedd') from BP to allow construction of a new gas-fired power station;

• with its 50:50 joint venture partner Viking Energy Ltd (which is 90% owned by the Shetland Charitable Trust), submitted to Scottish Ministers an application for consent to build a 540MW (megawatt) onshore wind farm on Shetland; and

• developed a proposal to construct a pumped storage facility alongside its Sloy hydro electric power station near Loch Lomond for which an application is being submitted to Scottish Ministers.

Abernedd

Abernedd has applied for consent to construct and operate a new combined cycle gas turbine (CCGT) power station of up to 870MW on a brownfield site at Baglan Bay in south Wales, where there is already in place the key electricity transmission, gas and water infrastructure for the first phase of the power station.  

The consideration for the acquisition will be determined by the progress of the development.  Subject to finalising the details of the agreement and timely planning consent being secured, SSE expects to construct the new power station in two phases to maximise plant flexibility. In the first phase, a unit with capacity of 435MW will be developed, with a view to becoming operational around 2013; a second unit, with a similar capacity, should become operational around 2016.  

The two-unit approach gives SSE greater flexibility in the timing and nature of the development and, subject to planning consent being secured, a final investment decision on the first phase will be taken by the end of this financial year.

Including its share of joint ventures and associates, SSE currently has 4,500MW of gas- and oil-fired capacity for generating electricity. The commissioning of the new CCGT power station at Marchwood, in which SSE has a 50% stake, later this year will increase that to 4,900MW and the completion of the first phase of the Abernedd development would take it to 5,300MW.  

Viking

Viking Energy Ltd and SSE have submitted to Scottish Ministers an application for a 150 turbine, 540MW wind farm on Shetland. The involvement of Viking Energy Ltd, which is 90% owned by Shetland Charitable Trust, means there is extensive community involvement in the development of this large-scale wind farm, from which it could benefit directly.  

The application has been submitted after five years of research, analysis and consultation. Based on data collected on Shetland, the wind farm could be up to twice as productive as the average wind farm on mainland Scotland with an expected annual ouptut of around 2TWh (terrawatt hours).  

SSE has set itself the target of owning and operating 4,000MW of renewable energy capacity in the UK and Ireland by the end of 2013 and to build on this in the subsequent years when developments like Viking are expected to be completed.

The development of the wind farm is subject to the provision of an undersea cable connecting Shetland to the electricity transmission system on the Scottish mainland, for which Scottish Hydro Electric Transmission Ltd expects to submit a planning application in the coming months.

Sloy

SSE is submitting to Scottish Ministers an application for consent to develop a 60MW pumped storage scheme alongside its152MW Sloy hydro electric power station, near Loch Lomond. This means that in addition to electricity produced from water collected and held in Loch Sloy reservoir, Sloy will generate electricity using water pumped from Loch Lomond to the reservoir.

In an average year, Sloy produces around 120GWh (gigawatt hours) of electricity and converting it to a pumped storage facility will allow it to produce an additional 100GWh of electricity in a typical year to help meet peak demand. SSE currently expects that developing a pumped storage facility at Sloy will require investment of over £30m. SSE is also exploring whether other potential sites could be suitable for the development of pumped storage schemes.

Ian Marchant, Chief Executive of SSE, said:

'These developments underline our commitment to renewable energy and are important steps in our long-term investment plans to help meet the UK's energy needs.

'Since we signed the partnership agreement with Viking Energy Ltd a great deal of work has been done to design a wind farm that we believe will be one of the most efficient in the country. 

'Hydro electric schemes which use stored water to generate electricity have an important part to play in meeting peak demand and also in complementing the growing, but variable, amount of output from wind farms. This means that developments like Sloy that increase storage and generation capability will play a bigger part in meeting energy needs as the development of renewable energy gathers pace.

'Thermally-efficient gas-fired power stations will make a crucial contribution to meeting this country's energy needs over the next two decades, as the move to lower carbon power production gathers momentum.  

'Abernedd's site at Baglan Bay offers an ideal position for a new power station and will be a flexible development to complement our core investment in renewable sources of energy, thus maintaining the diversity and optionality within our generation portfolio which is at the heart of our business and which contributes so much to the security of the UK's energy supplies.' 

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