UK utility ScottishPower has announced plans for the complete shut down or disposal of its fossil fuel generation fleet in favour of investment in a 100 % renewables mix.
A major component of this policy is the sale of its conventional generating fleet to Drax for £702 million, which has just been completed, making it the first UK-based integrated energy company to fully exit coal and gas generation. It said that the move represented a “pivotal shift” in strategy for the company and that it planned to invest £5.2 billion in a UK pipeline of renewables to double its existing 2.7 GW on and offshore wind energy-based generating portfolio of which over 2 GW was built by ScottishPower. It will also invest in grid networks and smart energy technologies.
ScottishPower has sold eight generating sites totalling 2566 MW of capacity to Drax. The assets include the 805 MW Damhead Creek CCGT in Kent, the 715 MW Rye House CCGT in Hertfordshire and the 420 MW Shoreham CCGT in southern England. It will sell three hydropower plants which are also part of the Drax deal (Cruachan, 440 MW pumped storage, Lanark 17 MW hydro and Galloway 109 MW hydro, all in Scotland) but retain the Hatfield gas storage asset and the Avonmouth development site.
The transaction is conditional upon approval by Drax’s shareholders.
“Energy companies must be part of the solution to climate change,” said Ignacio Galán, chairman and CEO 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.”
Keith Anderson, chief executive of ScottishPower, said: “This is a pivotal shift for ScottishPower as we realise a long-term ambition. 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.”
In ten years, the company has shut down all its coal plants. “Every working day we are investing over £4 million 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.”