Britain's SSE slashes offshore wind portfolio

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* 690 MW Islay project to be shelved

* Will no longer invest in 340 MW Galloper project with RWE (Xetra: RWE.DE - news)

* Aims to cut stake in 750 MW Beatrice project to 50 pct

By Susanna Twidale

LONDON, March 26 (Reuters) - British utility SSE (Berlin: SCT.BE - news) said it would shelve two planned offshore wind farm developments and reduce its stake in a third project as it freezes energy prices and seeks to cut costs.

SSE (LSE: SSE.L - news) 's announcement came part as of a bigger plan on Wednesday to split its wholesale and retail divisions and freeze prices.

In January the company said it would review the offshore wind business after its two main projects failed to qualify for state guarantees.

SSE said it would no longer develop the 690 megawatt (MW) Islay wind farm off the west coast of Scotland or invest in the 340 MW Galloper project off the coast of Suffolk, which is a 50:50 partnership with RWE Innogy.

It cited costs and a lower rate of return from Galloper than from other investment projects.

In response, German utility RWE said it was too early to make its decision on the future of the project.

The utility will also seek to reduce its 75 percent stake in the 750 MW Beatrice project off the east coast of Scotland to no more than 50 percent. Spanish oil and gas firm Repsol (TLO: REP-U.TI - news) owns the other 25 percent.

SSE said it would probably make a final investment decision on the Beatrice project in early 2016.

SSE said it would continue to support two projects at the earlier application stage: SeaGreen, a 50:50 partnership with Fluor Limited to build two 525 MW wind farm in the Firth of Forth, Scotland and the Forewind project with a group of companies to build two wind farm projects of up to 1,200 MW each off the east coast of England. (editing by Jane Baird)