| | | BOMBSHELL: ScottishPower Ditches Remaining Gas Plants In Move To 100% Wind
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October 17th, 2018 by Joshua S Hill
cleantechnica.com
Scottish power company ScottishPower announced on Tuesday that it has completed the sale of its traditional generation business to British electrical power generation company Drax Group for £702 million in cash, resulting in ScottishPower becoming the first integrated energy company in the UK to shift completely from coal and gas to wind power.
Shoreham CCGT Power Station
The two companies made the announcement on Tuesday, revealing that Drax Smart Generation, a subsidiary of the Drax Group, would acquire ScottishPower’s portfolio of pumped storage and hydro- and gas-fired generation for £702 million in cash. While the acquisition bundles several technologies, the focus is on the sale of four combined cycle gas turbine power plants, which finalizes the sale of the company’s coal and gas assets, signalling its completed transition to being a 100% wind energy company.
This makes ScottishPower the first vertically integrated UK energy company to exit coal and gas electricity generation and the first to transition to being powered entirely by renewable energies.
“This is a pivotal shift for ScottishPower as we realise a long-term ambition,” said Keith Anderson, Chief Executive of ScottishPower. “We are leaving carbon generation behind for a renewable future powered by cheaper green energy. We have closed coal, sold gas and built enough wind to power 1.2 million homes.
“Every working day we are investing over £4m to deliver cleaner, smarter power for customers. From today we can focus solely on making energy generation cheaper, cutting carbon quicker, building smart grids and connecting customers to renewable electric future for transportation and heating.”
Over the past decade, ScottishPower has closed all its coal plants, and sold its gas and hydro stations, while building up a portfolio of 2,700 MW worth of wind power either already operating or under construction, and a pipeline of future wind projects worth over 3,000 MW. Included in the company’s pipeline is 2,900 MW worth of offshore wind — in addition to the 714 MW East Anglia ONE offshore wind farm currently under construction.
“Energy companies must be part of the solution to climate change,” added Ignacio Galán, Chairman and Chief Executive of Iberdrola, ScottishPower’s parent company. “Iberdrola is acting now to cut carbon emissions 30% by 2020 and be carbon neutral by 2050. The sale of these generation assets is consistent with our strategy.”
Unsurprisingly, the move was warmly welcomed by the renewable energy sector and its supporters.
“This is a hugely welcome move from Scottish Power and another clear signal that the clean energy transition is accelerating,” explained Dr Sam Gardner, acting director at WWF Scotland. “Too often people talk about renewables being the future but this just shows how critical a role they already play in the here and now – cutting emissions, creating jobs and keeping our lights on. The latest climate science tells us that we will need to see this kind of transition replicated around the world and we’re proud to see a Scottish company creating a portfolio that works to keep people and nature safe.”
Cruachan pumped storage hydro
As for Drax, the acquisition is being billed as a “significant expansion of Drax’s flexible, low-carbon and renewable generation model” with the addition of 440 MW from the Cruachan pumped storage hydro facility, 126 MW from the run-of-river hydro locations at Galloway and Lana, a biomass-from-waste facility, and the four CCGT stations — Damhead Creek (805 MW), Rye House (715 MW), Shoreham (420 MW) and Blackburn Mill (60 MW).
“I am excited by the opportunity to acquire this unique and complementary portfolio of flexible, low-carbon and renewable generation assets,” said Will Gardiner, Chief Executive Officer of Drax Group. “It’s a critical time in the UK power sector. As the system transitions towards renewable technologies, the demand for flexible, secure energy sources is set to grow. We believe there is a compelling logic in our move to add further flexible sources of power to our offering, accelerating our strategic vision to deliver a lower-carbon, lower-cost energy future for the UK.
“This acquisition makes great financial and strategic sense, delivering material value to our shareholders through long-term earnings and attractive returns,” he continued. “We are combining our existing operational expertise with the specialist technical skills of our new colleagues and I am looking forward to what we can achieve together.” |
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