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Swedish venture puts wind in Scottish & Southern’s sails

by Susanna Twidale

The UK’s largest renewable generator Scottish & Southern Energy has moved into the Swedish market with a 50:50 joint venture with Gothia Vind to develop new wind farms in the country. The deal comes via its renewables development arm Airtricity, which it purchased earlier this year for £1.08 billion.

Gothia and Airtricity plan to develop 200 Mw of capacity with the first of the projects set to come onstream in 2011. Scottish & Southern says it’s part of the company’s overall plan to invest some £500 million over the next five years in new renewables markets and technologies.

The deal comes hot on the heels of a £15 million investment to purchase a 20% stake in Geothermal International, a supplier of ground source heating and cooling systems. ‘Scottish & Southern is rapidly building a strong portfolio of clean energy businesses that cover almost every part of the renewable and alternative energy market in the UK. Geothermal energy has been an obvious missing piece in this portfolio and this deal fill the gap very effectively,’ says chief executive Ian Marchant.

Energy drag

Scottish & Southern already has several wind and hydro plants in the UK and building up a diverse renewable generation mix has been an important focus.

Marchant has criticised UK planning procedures for wind farm build, saying: ‘It remains much too time-consuming and unpredictable to be an effective means for realising Scotland’s and the UK’s renewable energy requirements.’

However, recent developments have suggested that the environment has improved. The company recently gained approval for its 87.5MW Gordonbush wind farm in south-east Sunderland, the fifth of its wind farms to gain approval in the last 18 months. ‘While the Gordonbush proposal has spent almost five years in the planning system, there are encouraging signs that the planning process is beginning to speed up. Given the scale of the energy challenges facing the country it is important these encouraging signs represent a sustained commitment to a better planning process,’ he says.

Cleaning up

Currently only around 2% of the UK’s energy needs are met by renewable sources but the country has signed up to Europe-wide plans to increase this to 20% by 2020.

Scottish & Southern has a renewable capacity of some 2,000MW but is aiming to double this by 2013. The company produced a total of 10,017MW in 2007, some 1,518MW of which were renewable.

The company has also recently made moves to get into the burgeoning fuel cell market by taking a 21% stake in Logan Energy, a subsidiary of US fuel cell installation and maintenance company Logan Energy Inc. The new subsidiary will develop its activities in the UK and Europe and will install a 200Kw fuel cell combined heat and power unit at Scottish & Southern’s operations centre in Havant. It has also won a contact to install a similar unit at the Transport for London offices. ‘This deal provides Scottish & Southern with an experienced partner in the fuel cell installation market and is an important part of our strategy to develop a portfolio of clean energy businesses,’ says Scottish & Southern head of ventures David Gardner.