The Anonymous Widower

SSE Renewables Completes Acquisition Of European Renewable Energy Development Platform

The title of this post, is the same as that of this press release from SSE.

This paragraph introduces the deal.

SSE Renewables has completed the transaction with Siemens Gamesa Renewable Energy (SGRE) to acquire its existing European renewable energy development platform for a consideration of €580m.

I have a few thoughts.

Why Have Siemens Gamesa Sold Their European Renewable Energy Development Platform?

This article on Renewables Now is entitled Siemens Gamesa Wraps Up Sale Of 3.9-GW Wind Portfolio To SSE Renewables, gives a reason.

For the turbine maker, the sale represents one of the measures implemented to rein in profit losses quarter after quarter due to internal challenges, high costs and supply chain issues.

As with many things, it appears to be all about the money.

Can SSE Renewables Afford It?

Consider.

• SSE are developing the 1.5 GW/30 GWh Coire Glas pumped stored hydroelectric power station. I doubt the cost of that will be under a billion pounds.
• SSE developed the 0.5 GW Greater Gabbard wind farm and that development cost £1.5 billion
• SSE Renewables and Equinor are estimated on the web to be investing £9 billion in the Dogger Bank wind farm, which could deliver 3.6 GW.
• SSE Renewables have just announced the 4.1 GW Berwick Bank wind farm, which must need at least £9 billion.

SSE seem to have found a Scottish magic money tree.

€580m is just small change.

What Projects Are Included In The Deal?

This is a paragraph from the press release.

The SGRE portfolio includes c.3.8GW 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 1.4GW of additional co-located solar development opportunities. Development of the portfolio of projects has continued to progress since the acquisition was announced in April, with additional opportunities identified and permits and grid connections advancing. Over 2GW of the total pipeline is considered to be at a secured stage, where a grid connection or land agreement has been secured or relevant permits granted.

Note.

1. As an engineer, I note that there is no offshore wind, which surely is the renewable energy development with most risk and installation costs.
2. SSE Renewables have a lot of experience of onshore wind, so delivering and financing the extra 3.8 GW, shouldn’t be a problem.
3. The 1.4 GW of solar comes with the word co-located. Wind and solar together, perhaps with a battery must surely be a good investment in the sunnier climes of Europe.

It doesn’t look to me that SSE Renewables have bought a load of assets that no-one wants.

I do wonder thought, if Siemens Gamesa were having trouble progressing this large diverse portfolio of projects, due to a shortage of resources like money and engineers.

So are SSE finishing off a few projects and they can transfer a few engineers to these projects?

Are SSE Spreading The Risk?

SSE operate mainly in the UK and Ireland, so is adding Spain, France, Italy and Greece a good idea?

Of the four new countries, it’s unlikely that all will perform well, but a mixed portfolio is usually a good idea.

Will SSE Renewables  Buy Siemens Gamesa Turbines In The Future?

SSE Renewables seem to do an individual deal on each wind farm, as no one manufacturer dominates.

But now Siemens Gamesa may be more financially stable, perhaps they can get a better deal for the turbines they want.

Conclusion

I don’t think SSE Renewables have done a bad deal.

September 5, 2022 - Posted by AnonW | Energy | France, Greece, Italy, Onshore Wind Power, Siemens Gamesa, Solar Power, Spain, SSE, SSE Renewables, Wind Power