SSE sells off energy-from-waste facilities in £1bn deal
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Energy firm SSE has agreed to sell its stake in three UK energy-from-waste facilities for a deal worth nearly £1bn.
The sale to a fund managed by First Sentier Investors comes as part of the Scottish energy giant’s attempts to raise £2bn from selling off assets.
Two facilities in Ferrybridge and one and one in Skelton Grange will be transferred in the deal – no mention was made of any job losses occurring because of it.
The Ferrybridge plants each have an installed capacity of 75MW and are capable of processing around 725,000 tonnes and 675,000 tonnes of waste every year.
The Skelton Grange facility has not yet been constructed and is due to reach financial close around April 2021, commencing commercial operations in 2025.
It will have an installed capacity of 45MW and will be capable of processing around 400,000 tonnes of waste annually.
Today’s announcement follows the sale of SSE’s 25 per cent non-operating stake in Walney Offshore Wind Farm to Greencoat UK Wind for £350m.
The proceeds of these disposals will support the company’s plans to invest £7.5bn in low-carbon energy infrastructure over the next five years, which the firm said would help the UK to reach net-zero carbon emissions, as well as reduce SSE’s net debt.
Gregor Alexander, finance director, said: “This sale marks a major step in our plans to secure at least £2bn from disposals by autumn 2021, with just over £1.4bn now delivered.
“While these multi-fuel assets have been successful ventures for SSE, they are non-core investments and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses.
“Our disposal programme demonstrates how the company can create value from our assets and supports our plans to invest £7.5bn over the next five years in the low-carbon infrastructure needed to stimulate a green economic recovery and help the UK transition to a net-zero future.”
Mark Nelson, an analyst at Killik & Co, said: “The divestments will help to strengthen the balance sheet and support the company’s plans to invest £7.5 billion in low-carbon energy infrastructure over the next five years.”
He added the latest sale will boost SSE’s increased focus on electricity networks and renewable energy, in particular UK offshore wind.
Last year, SSE sold its retail business to OVO Energy which continued to the use the brand under licence.
Ofgem recently ruled that prior to that sale, SSE Energy Services failed to meet its smart meter installation target for 2019 and it subsequently fined Ovo £1.2m for the failing.
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