SSE completes €308 million acquisition of Endesa’s Irish subsidiary

Scottish & Southern Energy, through its wholly-owned subsidiary SSE Generation, reported it had completed the acquisition of Endesa Ireland. The operation had been agreed in June 2012 with Spanish Endesa Generacion. The transaction has been valued at €308 million (£246 million) plus an estimated €53 million for working capital.

In addition to the transaction amount, SSE said in a press note it expects to incur a further €137 million 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 €10 million 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,” the British company explained.

Its completion 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.

“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 €1.7 billion the total investment SSE has made into the Irish energy market,” said Paul Smith, SSE managing director of Generation.

The assets which have been acquired include four 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.

The transaction includes further options for the future development of electricity generation plant in Ireland, including a proposed 450MW CCGT plant at Tarbert, Co. Kerry, which has full planning permission, and two brownfield development sites.