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£1.6bn wind farm deal boost for North Sea

Source: 
The Herald

SCOTTISHPOWER’s Spanish owner has underlined its faith in the potential to develop more North Sea renewable energy assets after clinching a deal to sell a stake in a giant wind farm that values the facility at £4.1 billion.

Iberdrola has agreed to sell a 40 per cent interest in the East Anglia One development to Macquarie investment bank for £1.6bn.

The deal highlights the scale of the development, which has been led by ScottishPower Renewables engineering experts in Glasgow and London.

The 714 megawatt wind farm will be one of the biggest in the world when it is commissioned next year. It is expected to generate enough electricity to power 600,000 homes.

Macquarie’s decision to take a significant minority stake in East Anglia One reflects its confidence in the commercial prospects for the offshore renewables industry amid the drive to tackle climate change.

“The need to accelerate our transition to a greener economy has never been greater,” said the bank.

“We’re committed to driving the UK’s energy transition,establishing offshore wind as the backbone of the UK’s new low-carbon energy system.”

Macquarie’s investment in the sector should allow the bank to capitalise on advances that have helped improve the economics of offshore wind farms.

The cost of developing andoperating wind farms has fallen as the industry has matured.

The support provided for generators under the official Contracts for Difference scheme helps underpin returns for investors.

Macquarie acquired stakes in a range of wind farms through the £2.3bn purchase of the Green Investment Bank in 2017 following the privatisation of the organisation. This was formed to encourage investment in such assets.

The deal with Macquarie will support increased investmentin offshore renewables byIberdrola, which reckons the best long-term prospects in the UK lie in renewables.

ScottishPower completed the shift from coal and gas to 100% green power by selling its conventional generation business to Drax for £702m in October.

Announcing the deal with Macquarie yesterday, Iberdrola reaffirmed its ambition to lead the offshore wind farm market.

The company said it will focus investment on the North Sea, the Baltic Sea and the United States.

It will use the proceeds from the deal with Macquarie to support work on the second and third phases of the East Anglia development.

The company is not building any wind farms in the Scottish North Sea.

However, sources said ScottishPower is interested in participating in the forthcoming auction for support for developments offScotland under the Contracts for Difference scheme.

In February ScottishPower said it planned to invest a record£2 billion in clean energy in the UK this year, with plans to build more onshore wind farms and to install electric vehicle charging points across Scotland.

“Onshore wind remains the lowest cost technology for new electricity generation in the UK and ScottishPower sees substantial opportunities for the continued development of onshore wind projects across Scotland and other areas of the UK,” it said then.

The company has investedheavily in onshore wind farms in Scotland.

Its portfolio includes the Whitelee onshore wind farm on Eaglesham Moor south of Glasgow. The biggest wind farm in the UK, Whitelee has 215 turbines which generate enough electricity to power around 300,000 homes.

East Anglia One will include up to 102 turbines.

ScottishPower Renewables operates the West of Duddon Sands wind farm off Cumbria.

Scottish Hydroelectric owner SSE recently completed thedevelopment of the 588 megawatt Beatrice wind farm eight milesoff the Caithness coast.

CREDIT: Mark Williamson

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