Utility company ScottishPower will be 100% focused on wind following the £702m divestment of its gas and hydro assets in the UK.
The Iberdrola subsidiary has agreed to sell its 2.5GW “traditional generation” business to Drax Group as part of a major strategic restructuring.
Assets transferred include the iconic 440MW Cruachan pumped storage plant in Scotland, a number of smaller hydro stations and a fleet of gas-fired plants.
ScottishPower will invest £5.2bn to 2022 in renewables, enhanced grid networks and smart technology. Its forward-looking offshore wind project pipeline, for example, includes 2.9GW of wind beyond the under-construction 714MW East Anglia 1.
“The company is closely following the proposals by the Crown Estate and Crown Estate Scotland with ambitions to secure additional development areas in the next round of offshore wind leases throughout the UK,” it said.
The Drax deal is part of Iberdrola’s €3bn global asset rotation plan, announced to the market in February 2018 as part of the company’s strategic outlook. The Spanish company aims to reduce emissions by 30% by 2020 and 50% by 2030 compared to 2007 and be carbon neutral by 2050.
ScottishPower chief executive Keith Anderson 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.”
He added: “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.”
Drax shareholders must still approve the deal.