SSE plc (LON:SSE) Renewables has entered into an agreement with Siemens Gamesa Renewable Energy (SGRE) to acquire its existing European renewable energy development platform for a consideration of €580m.
The SGRE portfolio includes c.3.9GW of onshore wind development projects – around half of which is located in Spain with the remainder across France, Italy and Greece – with scope for up to 1GW of additional co-located solar development opportunities. SSE will also take on a team of around 40 employees with vast experience in the sector.
The transaction is likely to complete by the end of September 2022, subject to receipt of relevant foreign direct investment and regulatory approvals. The transaction does not require SSE shareholders’ approval.
The acquisition marks SSE’s entry into Southern Europe, building on its successful renewables business in the UK and Ireland where it owns and operates 4GW of renewable assets, including nearly 2GW of onshore wind, with a secured pipeline of nearly 11GW across onshore wind, offshore wind and hydro projects.
The addition of the SGRE platform is highly complementary to SSE’s strategic objectives and is consistent with the SSE Group’s Net Zero Acceleration Programme (NZAP), which outlines fully funded £12.5bn capital investment plans to 2026 alongside ambitious 2031 targets, aligned with 1.5 degree science based targets.
SSE Renewables is aiming to have around 500MW of renewable projects from the SGRE portfolio operational by March 2026, with a further at least 500MW in construction. This will contribute to the NZAP targets of:
· 4GW of net additions over five years, doubling installed renewables capacity to 8GW (net) by 2026;
· maintaining a pipeline of at least 15GW of renewables development projects;
· targeting delivery of at least 1GW net capacity additions per year during the second half of the decade; thereby
· trebling installed renewables capacity to over 13GW (net) and in turn target a fivefold increase in renewables output to 50TWh annually by 2031.
The transaction will bring together the existing SGRE management team’s significant development experience across continental Europe and SSE’s expertise in constructing and operating wind farms, supported by its balance sheet strength. With many of the projects in the SGRE portfolio at an early stage of development, the existing SGRE teams will be an integral part of progressing the projects and supporting SSE’s growth strategy in Europe.
The four countries in which the SGRE portfolio of development assets are located have strong growth prospects, underpinned by 2030 renewables or carbon reduction targets and attractive remuneration schemes. The platform, alongside the experienced development teams, will provide an excellent base for continued sourcing of development opportunities across onshore and offshore wind, solar, batteries and hydrogen, all of which are core to SSE’s growth strategy. It also presents opportunities to enter wider European markets.
As part of the transaction, SSE Renewables will have the opportunity to partner with SGRE on the provision of turbines and associated long-term maintenance services for a portion of wind farms in the portfolio.
Stephen Wheeler, Managing Director of SSE Renewables, said: “We are delighted to boost the delivery of SSE’s Net Zero Acceleration Programme by expanding our existing renewables business into Southern Europe through this acquisition. Mainland Europe is an exciting growth market for onshore wind, with clear carbon reduction targets and supportive policies, and the expert management team will complement our sector-leading capabilities perfectly. The project portfolio brings some excellent assets and will provide a real springboard for our expansion plans in Europe across wind, solar, batteries and hydrogen.”
This acquisition strengthens SSE Renewables’ position as a leading renewables developer. The company is currently building more offshore wind capacity than any other company in the world: it is leading the construction of the world’s largest wind farm, Dogger Bank (3,600MW, SSE share 40%) and the world’s deepest fixed bottom offshore wind farm, Seagreen (1,075MW, SSE share 49%). Additionally, it is currently building the wholly owned Viking onshore wind farm (443MW) in Shetland, expected to be one of the UK’s most productive wind farms on completion. SSE Renewables’ development pipeline includes one of the world’s largest offshore wind opportunities, Berwick Bank (4.1GW) as well as a floating wind site of up to 2.6GW (SSE share 40%) in Scotland secured in the ScotWind leasing round. On the international front, SSE Renewables recently entered the Japanese offshore wind market through the formation of SSE Pacifico and is actively exploring opportunities in the US and Northern Europe.