Scottish and Southern Energy (SSE) is to sell half the Greater Gabbard offshore wind power project to npower renewables, the UK subsidiary of renewable energy firm RWE Innogy, in a deal that will raise £308 million in cash.
Under the agreement, npower's 50 per cent stake in the 500 MW project amounts to a reimbursement of half the capital costs already incurred by SSE in developing Greater Gabbard.
SSE acquired a 50% stake in the project when it bought Airtricity earlier this year. It took its stake to 100% when it bought out Airtricity's then partner, Fluor International, but always intended to sell 50% of the project, which will cost a further £1.3bn to develop. Onshore construction of the wind farm has already started while offshore activity is scheduled to begin in 2009. On completion Greater Gabbard will be the largest wind site of its kind in the world, but is likely to be overtaken by London Array due to be operational by late 2011. It will be located 25 km off the coast of eastern England in the outer Thames estuary and will be commissioned in two phases, with the entire construction scheduled for completion in 2011.
The deal not only raises funds for SSE but will also allow npower to increase significantly its position in the UK’s fast-growing offshore wind power sector. SSE and npower will share equally the output of the project. Under the terms of the deal SSE will be the operator of the windfarm in its development and operational stages.
Paul Cowling, managing director of npower renewables said: “We look forward to working with SSE on the Greater Gabbard project, and in addition to our financial input, we are pleased to be able to offer our experience of developing, building and operating offshore wind farms in the UK.”
The £1.3 billion construction cost excludes the connection to the electricity grid. The wind farm's load factor will be 40 per cent, says SSE. Three 132 kV sub-sea cables will bring the power ashore to a new substation to be built near Sizewell.
“Greater Gabbard is a major development in every sense, and its significance is underlined by RWE Innogy’s investment in it,” said Ian Marchant, CEO of SSE. “Our priority is to make sure construction work proceeds in an efficient and timely manner, so that it can begin to play its important part in meeting the UK’s energy needs as soon as possible.”
Fluor sold its stake in the project to SSE earlier this year for £40 million is cash. Fluor remains involved in the project, acting as the main EPC contractor.
Npower currently operates the 60 MW North Hoyle offshore wind farm of the North Wales coast and is building the 90 MW Rhyl Flats offshore project, also in North Wales.
The Greater Gabbard project is the first UK offshore wind farm to be built outside territorial waters and will play a major role in plans to expand renewable energy generation in the country. It forms part of SSE’s plans to expand activities in the renewable energy market. It will be equipped with around 140x3.6 MW Siemens wind turbines installed in water depths of between 24 and 34 m. Electricity production from the project is expected to start in 2010.
The site covers two offshore areas, Inner Gabbard and The Galloper. The 140 turbines will be mounted on steel monopiles and transition pieces, in water depths of between 24 and 34 m.
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