SSE Plc SSE Acquisition of Generation Assets Completed

  SSE Plc (SSE) - Acquisition of Generation Assets Completed

RNS Number : 3118O
SSE PLC
09 October 2012




            ACQUISITION OF ELECTRICITY GENERATION ASSETS COMPLETED



SSE plc, through its wholly-owned subsidiary SSE Generation Ltd., has today
completed the acquisition announced in June 2012 of Endesa Ireland Ltd from
Endesa Generacion SA for a total cash consideration of €308m (£246m) plus an
estimated €53m (£42m) for working capital. In addition to the transaction
amount, SSE expects to incur a further €137m (£110m) to complete a 460MW CCGT
(combined cycle gas turbine) currently under construction at Great Island, Co.
Wexford.



This includes a deferred element of up to €10m (£8m) which will be paid on
completion of an upgrade to the grid at the Great Island CCGT site.



Adding to SSE's existing assets, this acquisition is a positive step forward
in delivering a balanced generation and supply business in Ireland. As stated
in June, itscompletion makes SSE the third largest generation capacity owner
in the all-island Single Electricity Market (SEM)with 1,568MW (around 13% of
installed capacity) in operation including 500MW of wind farm capacity to help
meet the energy needs of SSE's over 750,000 energy supply customers in
Ireland.



Generation assets in operation

The assets which have been acquired includefour thermal generation plant in
operation in Ireland with a total combined generating capacity of 1,068MW. The
principal function of each of the operational sites is to help maintain
security of electricity supply in the all-island SEM by being available to
respond to peaks in demand.The electricity generated is traded in the SEM,
where fixed capital costs and plant availability are remunerated via a
capacity payment mechanism, and variable costs, including fuel and carbon, are
remunerated through the energy market.



CCGT under construction

A 460MW CCGT (combined cycle gas turbine) is currently under construction at
Great Island, Co. Wexford, and is expected to be commissioned in 2014, at
which time the existing 240MW fuel oil unit will be decommissioned,
significantly reducing carbon emissions in Ireland. The modern and efficient
gas-fired power plant will utilise Mitsubishi Heavy Industries' proven CCGT
technology and will feature a 460MW Mitsubishi generation plant. The CCGT
energy project has consents forgas and grid connections.



Over the medium and long term, the completion of the 460MW CCGT at Great
Island and the continuing development of its wind farm projects will give SSE
a balanced generation portfolio in Ireland and a significantly increased
output of electricity that will have a lower CO[2]intensity than the SEM
average. In a typical year, the Great Island CCGT and SSE's existing wind
farms should generate the equivalent of around two thirds of the electricity
needed to supply SSE's customers in Ireland (based on electricity consumption
for the financial year ending 31 March 2012).



CCGT with consent for development and other options

The acquisition includes further options for the future development of
electricity generation plant in Ireland, including a proposed450MW CCGT plant
at Tarbert, Co. Kerry, which has full planning permission, and two brownfield
development sites.



Paul Smith, SSE Managing Director of Generation, said:

"We are delighted to announce the completion of the acquisition of Endesa
Ireland Ltd. This investment in Ireland is in line with our long term
commitment towards generating energy from low carbon sources including new
flexible CCGT generation and brings to around €1.7bn the total investment SSE
has made into the Irish energy market.



"This acquisition, which makes SSE the third largest energy company across the
island of Ireland, gives us substantial and diverse generation assets to
securely and cost-effectively meet the energy demand of our rapidly growing
Irish supply business, Airtricity, in a way that is sustainable for the long
term.



"Our priority now and over the next few years is to work with the new staff
joining the SSE family to build on the opportunities that this acquisition
presents including the construction of what will be Ireland's newest and most
efficient CCGT power station at Great Island."





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


ACQEALENEAAAFFF -0- Oct/09/2012 14:30 GMT