Iberdrola's subsidiary ScottishPower has agreed to sell its remaining thermal power generation assets in the United Kingdom to the British energy group Drax Group for a total consideration of £702m (€798m), as part of a major strategic restructuring. The transaction comprises 2,566 MW, mostly thermal assets (2 GW): the 805 MW Damhead Creek CCGT power plant in Kent, the 715 MW Rye House CCGT power plant in Hertfordshire, the 420 MW Shoreham CCGT power plant in Brighton and the 60 MW Blackburn Mill CCGT power plant in Blackburn. It also includes 566 MW of hydropower plants, namely the 440 MW Cruachan pumped storage hydro plant in Scotland, the 109 MW Galloway hydropower scheme in South West Scotland and the 17 MW Lanark hydropower scheme in Lanarkshire. ScottishPower will retain the Hatfield gas storage and the Avonmouth development site.
With this divestment, ScottishPower becomes the first vertically integrated energy company in the United Kingdom to entirely exit coal and gas-fired generation. The group will only focus on renewable power generation business. The company plans to invest £5.2bn (€5.9bn) to 2022 in renewable energies, enhanced grid networks and smart grid technologies. ScottishPower currently has 2,700 MW of wind power capacity operating or under construction in the UK, and a project pipeline standing at 3,000 MW, out of which 2,900 MW for offshore wind projects alone.
The transaction is in line with Iberdrola's €3bn global asset rotation plan and with its strategy to cut carbon emissions 30% by 2020 compared to 2007 and be carbon neutral by 2050.