Mark Williamson Group Business Correspondent
SCOTTISH Hydroelectric owner SSE is taking control of the Seagreen Wind
Energy business in a £118m deal that reflects its confidence in the
prospects for offshore renewables.
The Perth-based giant has agreed to acquire the 50 per cent stake in
Seagreen held by American engineering firm Fluor to increase its holding to
100%.
SSE announced the investment as chief executive Alistair Phillips-Davies
said the board regrets the group’s financial performance will be
disappointing this year.
The group announced earlier this month that it expected profits for the six
months to 30 September would be around half the level achieved in the same
period in 2017, citing the impact of warm summer weather and increased gas
prices.
“Well-intentioned decisions intended to mitigate commodity price risk to
SSE’s businesses through energy portfolio management will lead to a
disappointing outcome in terms financial results in 2018/19, something the
Board clearly regrets,” said Mr Philips-Davies yesterday.
SSE buys in supplies of gas and power from other firms as required to meet
the demand from the customers it supplies with energy.
However, Mr Philips-Davies said directors had made good progress with
efforts to reshape SSE to support long term growth with a focus on power
generation and related infrastructure.
SSE received a boost on Monday when Total said it had made a significant
find on a licence West of Shetland, which the utility has a 20 per cent
stake in.
The group plans to merge its retail operation with npower to form a new
standalone business.
The director of its wholesale business Martin Pibworth said: “The Seagreen
acquisition aligns with SSE’s ambition to create value from owning,
operating and developing clean energy assets and infrastructure.”
SSE has invested heavily in developing renewable energy assets including
offshore wind farms such as the £1.6bn Greater Gabbard complex off Suffolk,
which it developed with Fluor.
The company said its share of existing offshore wind assets is significant
in terms of volume and profit contribution, with Greater Gabbard and the
Walney wind farm in the Irish Sea successfully operating since 2012.
The £2.6bn Beatrice wind farm in the Outer Moray Firth is expected to be
fully operational from next year.
Mr Pibworth said SSE looked forward to taking full ownership of Seagreen as
the venture passes through a critical phase.
Seagreen won consent from the Scottish Government in 2014 to develop two
wind farms off Angus.
Earlier this month it applied for consent for an optimised plan based on
fewer, larger, higher capacity wind turbines than currently consented. It
said this would take advantage of advances in offshore wind turbine
technology since 2014.
SSE intends to bid for support for the wind farms under the official
Contracts for Difference auction it expects to be held in May.
The group said it also intends to develop further phases in the Seagreen area.
In a statement issued yesterday ahead of the company entering a closed
period, SSE said it continues to expect the 2018/19 financial year to be
one of transition.
SSE said earlier this month the price cap Ofgem has proposed to implement
from 1 January will result in annual profits for the division that serves
households being significantly lower than expected at the start of the
financial year.
The group expects to complete the demerger of the retail arm by the end of
its financial year on March 31. SSE shareholders will own 65.6% of the new retail
business.

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