New power station development agreed
ESB International announces agreement to develop UK power station with Scottish and Southern Energy plc
ESB International (ESBI) and Scottish and Southern Energy plc ("SSE") of the UK have signed an agreement to jointly develop a major new £400m gas-fired power station at Marchwood, Southampton.
In addition to SSE's purchase from ESBI of a 50% equity stake in the project, a Tolling Head of Terms has also been concluded between the two companies. Under this arrangement, SSE will supply gas to fuel the plant and purchase the plant's electricity offtake for a period of 15 years. The project will be financed on a nonrecourse basis, which is expected to reach closure by autumn 2006.
Marchwood Power Limited, the project company, holds the necessary consents under Section 36 of the Electricity Act to build the 850 megawatt combined cycle gas turbine (CCGT) power station. Construction will start early in 2007 and commercial operation is scheduled for 2009.
The facility will be built under a turnkey Engineering Procurement Construction (EPC) contract by a consortium of Siemens plc and Siemens AG. A long-term agreement for the maintenance of the plant has been entered into with Siemens plc. This major project will significantly augment and secure the UK energy supplies following a period in which there has been limited investment in new power plants.
The plant is located on the site of the former power station in the Marchwood Industrial Park. Redevelopment of this site will fully leverage the existing infrastructure. Marchwood power station will be jointly operated by ESBI and SSE and will be one of the most efficient generators of electricity in the UK through its use of advanced CCGT technology. At full capacity, the plant will be able to supply the needs of up to one million homes.
ESBI has been developing Marchwood Power since 2004. This builds on its portfolio of overseas investments, which most recently includes its operations at Amorebieta in Spain and Coolkeeragh in Northern Ireland, both of which successfully entered commercial operation in 2005.
ESB Chief Executive Padraig McManus commented: "We are very pleased to be partnering with Scottish and Southern Energy on this significant energy development and we welcome the opportunity to be working with Siemens. The project represents a further substantial investment by ESBI in its international portfolio and increases our presence in the dynamic UK energy market."
The Minister for Communications, Marine & Natural Resources, Mr. Noel Dempsey, T.D, commented: "I warmly welcome the announcement of the joint venture between ESBI and Scottish and Southern Energy in Marchwood in the UK. This agreement is further evidence of international confidence in the experience ESBI has gained through its operations both in the UK and worldwide."
The British Minister for Energy, Malcolm Wicks, MP, said: "A major part of our energy review was about enabling the power generation industry to deliver reliable and lower carbon energy supplies for the UK over the long term. This announcement by SSE and ESBI confirms that there is a significant appetite to invest in energy in the UK and is a very welcome development."
