Iberdrola, through its subsidiary ScottishPower, has agreed to sell its traditional generation assets in the United Kingdom to Drax Smart Generation, a subsidiary of the Drax Group for £702 million (€801 million).
Thus, the company becomes the first 100% renewable integrated energy business in the UK, as it disposes of 2,554 megawatts (MW) of traditional generation power, which includes mainly combined cycle gas plants. In recent years the company completed closure of the last coal-fired power plants in the country.
The sale – subject to the usual third party approvals for this kind of transactions – represents a further step in Iberdrola group’s commitment to moving towards a decarbonised economy, where the electricity sector should play a key role.
The company’s Chairman, Ignacio Galán, highlighted Iberdrola’s commitment to the United Kingdom: “It is a key market for us and one of the present and future pillars of the group. We will be investing £5.5 billion by 2022, primarily in increasing our renewable capacity, developing more and smarter grids and offering more personalised and efficient solutions to our customers.”
This will allow the company to continue increasing its weight in the United Kingdom, where it already has 2,700 MW of wind power capacity (installed or under construction), as well as a project pipeline in excess of 3,000 MW, of which 2,900 MW in offshore wind. These new developments will add to the 714-MW East Anglia One wind farm, which is currently under construction, and will become the world’s largest offshore wind farm when it goes into operation in 2020.
Ignacio Galán, who pointed out that this operation forms part of the company’s “standard rotation of assets”, added that “the world is changing” and that “the energy companies should be part of the solution to climate change and not part of the problem”.
Asset rotation plan
This divestment in the traditional generation business in the United Kingdom is part of the €3 billion euro asset rotation plan that Iberdrola announced last February, when it presented its Strategic Perspectives for 2018-2022.
This transaction in the United Kingdom adds up to the sale of the gas storage business in the United States and the disposal of its minority stake in Tirme. The total amount for transactions announced in 2018 exceeds €1 billion.