SSE Buys into Irish Power Market

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- Scotland's Scottish and Southern Energy plc (PINK:SSEZY) (SSE) (Perth) has given itself a significant foothold in the Irish power sector by agreeing to buy Endesa Ireland Limited (Dublin, Ireland).

The purchase of Endesa Ireland, a wholly owned subsidiary of Spanish energy giant, Endesa SA (MCE:ELE) (Madrid, Spain), for an agreed sum of €320 million ($406 million) gives SSE control of four operational power plants and options to build others. The plants include the 620-megawatt (MW) fuel oil Tarbert Power Station in County Kerry, the 240 MW fuel oil Great Island Power Station in County Wexford, the 104 MW peaking gasoil Tawnaghmore Power Station in County Mayo and the 104 MW peaking gasoil Rhode Power Station in County Offaly.

The acquisition is subject to approval by the Irish Competition Authority but SSE expects to complete the purchase later this summer, with the transfer of around 110 employees of Endesa Ireland to SSE.

In addition to the operational plants, SSE has acquired the 460 MW combined cycle gas turbine (CCGT) plant currently under construction at Great Island in Wexford, which is expected to be commissioned in 2014. At that time, the existing 240 MW fuel oil unit will be decommissioned. The new plant will use a Mitsubishi generation plant and permissions have already been secured for gas and grid connections. SSE will invest €125 million ($159 million) over three financial years to complete the construction of Great Island CCGT.

"The completion of this acquisition and of the Phoenix acquisition we announced in May will make SSE the third largest energy company across the island of Ireland and will take our total investment in energy on the island to around €1.7 billion ($2.15 billion) of which half relates to the period since Airtricity became part of SSE in 2008, commented Gregor Alexander, Finance Director of SSE and its Lead Director for Ireland. "The acquisition will give us substantial and diverse generation assets to help meet the energy needs of our increasing number of customers and give balance to our business in Ireland which will put it on a very strong footing for the long term."

With its existing Irish portfolio of 500 MW of wind farm capacity, the Endesa purchase will dramatically increase its generation assets to 1,568 MW, approximately 13% of the country's installed capacity.

SSE said that the option of more power sharing between Ireland and England in the future will become increasingly important. It pointed to the existing 500 MW Moyle interconnector between County Antrim and Ayrshire, as well as the 500 MW East-West interconnector between County Dublin and Denbighshire, which is due to be commissioned later this year. For additional information see October 28, 2011, article - Ireland-U.K. Interconnector Project Begins.

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