TIDMSSE
RNS Number : 4253Q
SSE PLC
28 June 2022
SSE Thermal and Equinor to acquire Triton Power
--- GBP341m transaction for three plants including 1.2GW Saltend
Power Station ---
--- Joint venture to drive decarbonisation of power generation
at strategic sites ---
--- Equinor strengthens position as the UK's trusted partner in
the energy transition ---
--- SSE remains committed to its existing science-based carbon
targets ---
SSE Thermal and Equinor have entered into an agreement to
acquire Triton Power Holdings Ltd from Energy Capital Partners for
a total consideration of GBP341m shared equally between the
partners.
The transaction represents another step forward for the two
companies' existing collaboration, supporting the long-term
decarbonisation of the UK's power system whilst contributing to
security of supply and grid stability through flexible power
generation in the shorter term. Following completion of the
transaction, SSE Thermal and Equinor will jointly own and run
Triton Power on a 50:50 basis.
Triton Power operates Saltend Power Station which is 1.2GW CCGT
(Combined Cycle Gas Turbine) and CHP (Combined Heat & Power)
power station located on the north of the Humber Estuary in East
Yorkshire.
Saltend Power Station is a potential primary offtaker to
Equinor's H2H Saltend hydrogen production project. H2H Saltend is
expected to kick-start the wider decarbonisation of the Humber
region as part of the East Coast Cluster, one of the UK's first
carbon capture, usage and storage clusters.
In addition, the portfolio includes Indian Queens Power Station,
a 140MW OCGT (Open Cycle Gas Turbine) in Cornwall, and Deeside
Power Station, a decommissioned CCGT in north Wales which provides
carbon-free inertia to the system.
Following the acquisition, SSE Thermal and Equinor will focus on
using the Triton Power portfolio as a platform to develop more
low-carbon projects to support the transition to net zero, building
on the decarbonisation work already carried out by Triton.
The transaction underscores SSE Thermal and Equinor's shared
ambition to decarbonise the Humber, which is the UK's most
carbon-intensive industrial region, as well as the UK more widely.
Initial steps to decarbonise Saltend Power Station are already
underway, targeting partial abatement by 2027 through blending up
to 30% of low-carbon hydrogen. In addition, carbon capture provides
an additional valuable option for the site. SSE Thermal and Equinor
will continue to work towards 100% abatement by 2035.
The transaction is expected to complete in September subject to
UK National Security Filing and EU Merger Control.
SSE Thermal and Equinor Low-Carbon Thermal Partnership
The 82 existing employees of Triton Power will be employed by
the joint venture in accordance with TUPE procedure. In line with
Just Transition principles, the Joint Venture is committed to
transitioning the assets for the net zero world through responsible
ownership and operation, and in consultation with the local
workforce and representatives.
This acquisition strengthens SSE Thermal and Equinor's portfolio
of joint projects, which bring together expertise in power, natural
gas, hydrogen and carbon capture and storage. This portfolio
includes three development projects within the Humber region:
-- Keadby 3 Carbon Capture Power Station, which could be the
UK's first flexible power station equipped with carbon capture.
-- Keadby Hydrogen Power Station, which could be one of the
world's first 100% hydrogen-fuelled power stations.
-- Aldbrough Hydrogen Storage, located in East Yorkshire, which
could be one of the world's largest hydrogen storage
facilities.
The two companies are also developing Peterhead Carbon Capture
Power Station, situated on the Aberdeenshire coast in Scotland and
there are further opportunities for hydrogen blending across SSE's
generation portfolio, including at Keadby 2.
SSE's emissions pathways
In March SSE published its Net Zero Transition Plan aiming to
achieve net zero emissions, by 2040 for scope 1 and scope 2, and by
2050 for scope 3. Interim Science-Based Targets, aligned to a 1.5
deg C pathway, support this net zero commitment.
Whilst this acquisition, once complete, will bring additional
emissions onto SSE's greenhouse gas emissions inventory in the
short term, SSE will not rebase its existing Science-Based Targets
for 2030. It therefore expects to emit no more greenhouse gas
emissions in 2030 than it is currently targeting, despite the
addition of operational power plants which provide important
services to the GB electricity system.
Aligned with UK Government policy to deliver Carbon Capture and
Storage clusters and a hydrogen economy, the assets provide
low-carbon opportunities in the latter half of this decade. This
acquisition will form part of SSE's Net Zero Acceleration Programme
(NZAP), which sets out plans to invest GBP12.5bn in the UK's
electricity infrastructure by 2026, including any further capital
incurred to decarbonise the existing activities. The acquisition is
also wholly aligned to SSE's net zero pathway, reflecting the
Group's wider ambition to invest in projects with a low-carbon
focus, and bolsters its options to deliver the more than 3GW of
low-carbon flexible thermal and distributed generation targeted for
FY31. SSE's NZAP targets and EPS guidance remain unchanged
following this acquisition.
Catherine Raw, Managing Director of SSE Thermal, said:
"Flexible energy will be absolutely essential as renewable
energy scales up over the coming years, providing vital back-up
while protecting security of supply. But the real prize will be how
we decarbonise that flexible energy over the longer term, and we
are excited, in particular, by the hydrogen and carbon capture
opportunities at Saltend. Together with Equinor, we will explore
every avenue to decarbonise Saltend and create new opportunities at
other assets so they can play a continued role in a net zero
future. We welcome our new colleagues and I look forward to working
with them all as they play a critical role over the years
ahead."
Irene Rummelhoff, Executive Vice President Marketing, Midstream
& Processing at Equinor, said:
"This acquisition together with SSE Thermal demonstrates our
commitment to building a broad energy partnership with the UK. We
will continue to work to supply the UK market with reliable energy
and to reduce emissions by offering a transition to hydrogen
through our hydrogen project H2H Saltend. Contributing to flexible
power supplies with low CO2 emissions to support weather-dependent
renewable energy is essential to ensure energy security through the
energy transition."
S
Notes to Editors
About SSE Thermal
SSE Thermal is responsible for SSE plc's flexible generation and
energy storage activities, with over 600 direct employees across
the UK and Ireland. As part of its commitment to achieving net zero
carbon emissions, the business has a core focus on decarbonising
its operations through carbon capture and storage (CCS) and
hydrogen technology. In addition to Keadby 3, SSE Thermal is
progressing plans with Equinor for another CCS-equipped power
station at Peterhead in Scotland, as well as further low-carbon
power stations in the Humber. SSE Thermal is part of the
FTSE-listed SSE plc, the UK's clean energy champion and a Principal
Partner to the UK Government for COP26. Find out more at
www.ssethermal.com .
About Equinor
Equinor is the country's leading energy provider, supplying
natural gas, oil and electricity, and aims to reach net zero
emissions globally by 2050. It is a leader in carbon capture &
storage and hydrogen, developing the H2H Saltend low-carbon
hydrogen production plant that is at the heart of the Zero Carbon
Humber alliance. It is collaborating with SSE Thermal on low-carbon
power projects using hydrogen and carbon capture in the Humber and
a further carbon capture power project in Scotland. It is
partnering in the Net Zero Teesside power project and, as part of
the Northern Endurance Partnership, it is developing CO2 transport
and storage infrastructure for the East Coast Cluster, comprising
the Humber and Teesside. Equinor's UK activities also include
operating offshore oil and gas fields and offshore wind farms, and
its expansion plans include Dogger Bank, the world's largest
offshore wind farm. Find out more at www.equinor.co.uk .
About Triton Power
Triton Power is a private independent power generating company
with a capacity of 1.35GW. It provides power to the UK wholesale
electricity market through its UK power stations, playing an
important role in security of supply when renewable generation does
not deliver. Its combined output is sufficient to provide
electricity for up to half a million homes in the UK.
Triton Power is part of Equinor's H2H (Hydrogen to Humber)
Saltend decarbonisation project which in March 2021 won joint
funding through ISCF (Industrial Strategy Challenge Fund) from
Innovate UK to carry out FEED studies to convert the Saltend CHP to
burn a 30% blend of Blue Hydrogen. Its Deeside Power Station's two
gas turbines have been repurposed to provide National Grid ESO with
vital system support services as part of a six-year contract.
Indian Queens Power Station is an OCGT (Open Cycle Gas Turbine)
power station located in Cornwall. The station has an output
capacity of 140 MW providing voltage support to the UK electricity
market as part of an ancillary services contract with National
Grid.
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