Greencoat UK Wind PLC has agreed to buy the South Kyle wind farm for £320mln from Vattenfall Wind Power. The consideration for the purchase will be due when the farm commences commercial operations, which is expected in the first quarter of 2023.
Britain has a climate target to reach net zero emissions by 2050 which will require it to build several more power renewable power plants. South Kyle will have a maximum capacity of 240 megawatts, able to provide enough electricity to power around 170,000 homes. Swedish state-owned Vattenfall on Wednesday took the final investment decision to build the project, which it will construct and manage for a minimum of ten years.
South Kyle is located five kilometres to the east of Dalmellington on the boundary of Dumfries & Galloway and East Ayrshire in Scotland. When complete, it will consist of 50 turbines with an aggregate generating capacity of 240 megawatts (MW) and a grid connection of 235MW. The wind farm is fully consented.
South Kyle is a subsidy-free wind farm and it has entered into a route-to-market power purchase agreement with Vattenfall Energy Trading GmbH for the 15 years following commissioning. Vattenfall will construct the wind farm and will manage the asset on behalf of Greencoat UK for a minimum of 10 years once operational.
“South Kyle is in close proximity to a number of other wind farms already owned by Greencoat UK Wind, and we are confident it will be another high-quality addition to our portfolio,” Tim Ingram, the FTSE 250-listed firm’s chairman said in a statement. Laurence Fumagalli of Greencoat Capital said the group was pleased to bring a large scale subsidy-free wind farm under its ownership.
“While we continue to expect the majority of our portfolio to comprise ROC [renewables obligation certificate] accredited assets, the scale of our portfolio and balance sheet allows us to acquire a combination of different types of UK wind farms, such as South Kyle, and thereby find best value for shareholders,” Fumagalli said. “In line with UK government guidance to ensure the safety of employees amid the COVID-19 pandemic, construction of the wind farm will begin once it is appropriate to do so,” Vattenfall said in a statement. Under current plans it is expected the wind farm would begin operation in early 2023.