SSE Buys Up Remaining Stake in Seagreen Offshore Wind Farm

SSE, the ‘Big Six’ energy supplier based in Perth, Scotland, has announced that it is buying the remaining 50% stake in its Seagreen offshore wind facility currently held by Fluor, the American global engineering and construction company.

The fee to Fluor is said to be £118 million.

The wind farm, which is in the mouth of the Firth of Forth off the coast of Fife, is forecast to be able to produce 1.5 Gigawatts of energy and peak capacity, making it the largest such farm in Scottish waters.  It is 391km², and 27 kilometres off the shore.  The deal, if approved, will mean that SSE controls 100% of the facility.  SSE announced that it would review Seagreen’s ownership structure “with the view to maximising value for SSE shareholders.”  The company further explained that it would continue “developing, owning and operating energy and related infrastructure and services in a sustainable way.”

Last week, Seagreen’s developers submitted plans to Marine Scotland that would see the site drastically overhauled.  The aim is to reduce the overall number of turbines, and thus reduce the perimeter area of the field for the moment – both to reduce the danger to shipping and to allow room for further expansion.  To improve the capacity, however, larger turbines will be used – standing up to 280 metres tall, with significantly larger blades.

The deal has yet to be approved by Crown Estate Scotland, the Government’s commercial arm in Scotland, which is responsible for wind farm oversight and grants licences for their construction on the Scottish territorial seabed.  If the purchase goes ahead, SSE will control an estimated 4 Gigawatts worth of wind power capacity, a significant proportion of the UK’s total production capacity, which is currently around 14 Gigawatts.

Martin Pibworth, SSE’s Wholesale Director, said: “The Seagreen acquisition aligns with SSE’s ambition to create value from owning, operating and developing clean energy assets and infrastructure.  We are looking forward to taking full ownership of Seagreen as we progress through this critical phase towards the CfD [contracts for difference] auction, expected in May 2019.”

Meanhwile, SSE is determined to continue expanding its operations around the Scottish coast.  Its second largest (behind Seagreen) facility, the Moray Firth field Beatrice, is due to come on line next year, and will contribute 588 Megawatts to the National Grid – enough to power 450,000 homes.  However, the firm has taken a profit hit in recent months, with their half-yearly profit to this September forecast to be half that of the equivalent period in 2017.  SSE blamed high gas prices and unpredictable weather conditions for the hit to renewables, and estimates that the overall hit will be around £190 million – twice their estimated figure of £80 million.

Chief executive Alistair Phillips-Davies explained: “Lower than expected output of renewable energy and higher than expected gas prices mean that SSE’s financial performance in the first five months has been disappointing and regrettable.  The underlying quality of SSE’s businesses remains strong, with regulated networks and renewables providing the core of what will be an infrastructure-focused SSE group in the years ahead.”

Ben Rich

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