A prominent reneweable energy investor has agreed to buy a giant windfarm in South West Scotland in a £320 million deal that signals confidence in the long term prospects for the UK market.
Greencoat UK Wind is buying the 50-turbine South Kyle windfarm from Sweden’s Vattenfall, which has spent years working up plans for the project.
The signing of the deal has given Vattenfall the confidence to commit to making the investment needed to build the wind farm. Vattenfall expects South Kyle to be operational in 2023, ten years after it submitted plans for the development.
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“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,” said Vattenfall.
London-based Greencoat said it was confident that South Kyle would be a high quality addition to a portfolio that includes stakes in 12 windfarms in Scotland.
South Kyle extends from Dumfries and Galloway into East Ayrshire. It is expected to be capable of generating enough power to supply 170,000 homes.
The wind farm will not benefit from subsidy support.
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Vattenfall has agreed to buy the power it produces for 15 years, presumably in the expectation it will be able to generate a commercial return by selling it on. It will manage the windfarm for Greencoat for at least ten years.
“The transition towards a fossil free future is in full swing and requires large investments in renewable energy. Therefore, we are delighted to be partnering with Greencoat UK Wind,” said Vattenfall, which got the green light for South Kyle in July 2017.
£104m windfarm deal reflects investor interest in Scottish assets
In December Greencoat Wind agreed to acquire the Windy Rig and Twentyshilling wind farms in Dumfries and Galloway from Norwegian energy firm Statkraft in a £104m deal.
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