SSE Renewables has reached financial close on the 1075MW Seagreen offshore wind project off the coast of Scotland after agreeing to sell a 51% stake to Total.
The developer has agreed to sell the shareholding for an initial consideration of £70m. The sale includes an equivalent stake in a potential extension opportunity at the site of up to 360MW.
SSE Renewables will continue to lead on the development and construction of Seagreen and will operate the asset on completion, which is expected in 2022/23.
The project will require a total spend of around £3bn, including offshore transmission CapEx of around £500m.
In addition to sale proceeds, historical capital investment of around £250m in the project will be repaid in full to SSE at financial close from project financing.
SSE’s future equity investment is expected to total around £850m over the years 2020 to 2022, with the equity contribution for 2020/21 financial year expected to be less than £50m.
The utility will contract around 30% of export capacity to its wider group while 40% is covered by a Contract for Difference. The developer said it is “well positioned” to strike long-term fixed price deals for the remainder.
SSE Renewables managing director Jim Smith said: “Following the agreement with Total we are looking forward to delivering the Seagreen offshore wind farm which will contribute towards building a cleaner, more resilient economy as we pursue a green recovery from coronavirus by unlocking £3bn low carbon investment, creating green jobs and generating the zero-carbon power we need to reach net zero.”
Total senior vice president for renewables Julien Pouget added: “We are glad to join the Seagreen project to contribute to the development of the renewable energy in Scotland alongside the leading offshore wind developer in the country.
“As one of the main players in the country’s energy sector, we’re confident that Total’s strong expertise in the offshore operations and in-depth understanding of the local supply chain will help ensure the success of the project.”
The transaction remains subject to public authorities’ approval and should be finalised by July 2020.
Meanwhile, Subsea 7 has won a contract for the engineering, procurement, construction and installation (EPCI) of the foundations and inter-array cables at the Firth of Forth site, as first reported in February by subscriber-only reNEWS.
Seaway 7, the Renewables business unit of Subsea 7, will manage the EPCI of the project’s 114 wind turbine foundations and approximately 300km of associated inter-array cables.
The agreement will immediately secure 30 jobs within Seaway 7’s Aberdeen office where the EPCI contract will be managed, with this number expected to reach around 50 jobs at the peak of activity.
Seagreen project director John Hill said: “Seaway 7 brings a wealth of offshore wind knowledge and expertise and we are pleased to welcome them and their Aberdeen team to Seagreen.”
UK minister for energy and clean growth Kwasi Kwarteng said: “Seagreen will create hundreds of jobs while powering millions of homes and helping to cut CO2 emissions, highlighting the key role offshore wind will play in our journey to a net-zero carbon emissions UK economy.
“The UK has invested more in offshore wind than any other country, is home to the world’s largest wind farms, and already supplies 10% of UK electricity demand – a figure we expect to double by the middle of the decade.”
The wind farm will feature 114 MHI Vestas 10MW turbines, with blades to be manufactured on the Isle of Wight.