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SSE acquires quarter of Walney offshore wind farm

Scottish and Southern Energy Plc (SSE) will acquire a 25.1% stake in the 367 MW Walney offshore wind farm west of the Isle of Walney in the Irish Sea, from DONG Energy, which will retain a 74.9% stake.

SSE will pay to DONG Energy a total consideration of up to approx £39 million for the stake in the offshore wind farm, of which approx £17m is subject to the operational performance of the wind farm.

As a shareholder in the offshore wind project, SSE will pay its pro rata share of the construction costs with payments being made when each phase of the Walney offshore wind farm is commissioned.

The Walney offshore wind farm is expected to have an average load factor of around 43% and produce around 1.3 TWh of electricity in a typical year. Under the UK government's plans for its Renewables Obligation Scheme, this output will qualify for 2.0 Renewable Obligation Certificates per MWh. SSE and DONG Energy will market the output of the offshore wind farm in proportion to their equity stakes.

Walney will be constructed in two phases, each totalling 183.6 MW, with construction of the first phase due to begin in the spring of 2010 and of the second phase in the spring of 2011

The offshore wind farm is expected to enter commercial operation in two phases: during the first half of 2011 and towards the end of 2011.

DONG Energy will manage the construction of the offshore wind farm with Siemens supplying the wind turbines, the second phase of which will feature a new 120 m rotor.

Excluding the connection to the Great Britain electricity network, the cost of constructing Walney is expected to total just under £1 billion.

In December 2009, SSE and DONG Energy announced an agreement to form a 50:50 joint venture to develop three offshore wind farms in the Dutch sector of the North Sea with a total capacity of just over 1 GW.

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