21st Dec 2006 10:58
Scottish & Southern Energy PLC21 December 2006 SCOTTISH AND SOUTHERN ENERGY PLC COMPLETION OF AGREEMENTS ON MARCHWOOD POWER LTD Scottish and Southern Energy plc ("SSE") and ESBI (Ireland's ESB International)have completed all of the financial and legal agreements in respect of their 50:50 joint venture, Marchwood Power Ltd. This will allow construction work on theventure's new 840MW combined cycle gas turbine (CCGT) power plant in Southamptonto begin early in 2007. The plant is expected to be constructed and incommercial operation in time for the winter of 2009/10. On completion, it will take SSE's ownership interest in gas-fired power stationsto almost 4,800MW and in electricity generation capacity as a whole to almost10,500MW. Under the agreements, the plant will be operated by Marchwood Power Ltd, whichwill be responsible for ensuring it is available to generate electricity asrequired by its customer, SSE. SSE will supply the gas for conversion intoelectricity at the plant, and the net carbon emissions allowances, and will sellthe resulting output into the UK electricity market. In this respect, thearrangements are similar to those which apply to Seabank Power Limited, in whichSSE also has a 50% stake, and which operates a 1,140MW CCGT power station nearBristol The plant will be built under a fixed price turnkey contract by Siemens plc,using gas turbines similar to those used at Seabank and at SSE's Peterhead PowerStation. It will have one of the highest thermal efficiencies in the UK and in atypical year will meet the electricity requirements of around one million homes. The expected capital cost for Marchwood Power Ltd is around £400m. It will befinanced on a debt/equity ratio of 80:20. SSE's equity investment in the venturewill, therefore, be around £40m. SSE will also provide 50% of the project debtrequirements (other than the VAT and Working Capital facilities) as a lender. The favourable location of the plant, on the coast of central southern England,means it will actually receive payments under the current arrangements forcharging electricity generators for use of the electricity networks. Ian Marchant, Chief Executive of SSE, said: "Significant investment in UK electricity generating capacity will be requiredduring the next 10-15 years to replace existing plant that is scheduled forclosure and to maintain an acceptable margin over expected energy electricitydemand. Marchwood is, therefore, a very important project for not just SSE andESBI, but the UK as a whole. "Its development, allied to our other investments in coal-fired power stationsand in renewable energy, will help to maintain SSE's position as the electricitygenerator with the most diverse and flexible portfolio of assets in the UK." Press Office Contact: 0870 900 0410Alan Young and Sharron Miller McKenzie This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SSE