SSE Renewables today announced the final investment decision (FID) for the roughly 1.1-GW Seagreen 1 offshore wind development in Scottish waters along with a number of related deals and contracts such as Total SA’s (EPA:FP) purchase of a majority stake in the project.
The French oil and gas giant has agreed to buy a 51% interest in the North Sea scheme for an upfront payment of GBP 70 million (USD 87.7m/EUR 78m) at closing and, subject to certain performance conditions, an additional GBP 60 million as earn-outs. The sale agreement includes an equivalent stake in an up-to-360-MW potential expansion of the project.
The stake buy in Seagreen 1 is seen to close by July, subject to receiving public authorities approval.
The total cost of the project is estimated at around GBP 3 billion, including offshore transmission capex of some GBP 500 million. Total said separately it has secured nearly 70% of external financing for its 51% stake.
The renewables unit of UK utility SSE Plc (LON:SSE) expects to make an equity investment of around GBP 850 million in the project over the period 2020-2022. Seagreen will be project financed with gearing of around 42%, it said. The company also pointed out that historical capital investment of some GBP 250 million in the project will be repaid in full to it at financial close from project financing.
Seagreen 1 comes with a 15-year contract for difference (CfD) for a 454-MW portion (42%) of the capacity at a strike price of GBP 41.61 per MWh in 2012 prices in the delivery year 2024/25. That deal is with the Low Carbon Contracts Company (LCCC). SSE will also sign a private CfD for an additional 30%.
The project has in place all required major permits and entered the construction phase in the first quarter of 2020. The plan is to have the wind farm up and running in late 2022.
SSE today also signed the turbine supply contract with MHI Vestas Offshore Wind, ordering 114 units of the V164-10 MW model. MHI Vestas will install the turbines at the project site off the coast of Angus next year and service them for a period of 15 years.
Separately, Petrofac Ltd (LON: PFC) confirmed a contract to design, supply and install the High Voltage Alternating Current (HVAC) onshore and offshore substations for the wind farm. According to Elie Lahoud, Petrofac's Group Managing Director - Engineering & Construction, the initial stages of the work are underway and progressing well.
At the same time, Subsea 7 SA (OSL:SUBC) said it has been contracted for the engineering, procurement, construction and installation (EPCI) of the foundations and inter array cables.
Meanwhile, SSE Renewables continues to develop its fully-owned Seagreen 2 and 3 projects with a combined capacity of up to 3,200 MW, it noted. The Crown Estate awarded exclusive development rights to both projects in 2010.
(GBP 1.0 = USD 1.253/EUR 1.118)
Choose your newsletter by Renewables Now. Join for free!
V164-10.0 MW. Source: Twitter @MHIVestas
