Yahoo Finance SSE and Total strike Scottish and Japanese wind power deals despite market weakness
Energy giants SSE and Total have both announced plans to push further into wind power, shrugging off an unusually poor year for the renewable energy source.
SSE said it had signed a $208 million (£153 million) deal to enter the Japanese offshore wind market through a joint venture with local operator Pacifico Energy.
“We want to help realise Japan’s renewables ambitions and be a significant part of their offshore wind plans during the decades ahead,” SSE Renewables MD Jim Smith said.
The deal comes as SSE fights off pressure to spin-off its renewables business from activist investor Elliott, run by billionaire Paul Singer. SSE said today it remains committed to renewables.
Elsewhere, French oil giant TotalEnergies submitted a bid to build a new offshore wind project in Scotland that could one day power 2 million homes.
Total has partnered with Macquarie’s Green Investment Group and Scottish developer RIDG on a proposal to build the West of Orkney Windfarm, which aims to supply two-gigawatts of power by 2029. Total has been working on the bid for 5 years.
“Our participation in the tender is an illustration of our commitment to support Scotland in its energy transition towards its Net Zero target by 2045,” said TotalEnergies’ Julien Pouget. “If awarded, this project will contribute to our goal of reaching 100 GW of renewable generation capacity by 2030.”
The two turbine projects come despite an unusually bad year for wind. Low winds have contributed to the ongoing energy crunch around the world and SSE said “unfavourable weather conditions” meant its energy generation was down 32% over the last 6 months.
SSE is predicting an 11% output shortfall across the year. The company, which has also been hit by high hedging costs as energy prices soar, guided earnings for the full-year of between 7.5p and 10p per share. That was about half of what the market expected.
“The operational issues we’ve faced in the first half are, by their nature, time-limited and the key months of our financial year are still to come,” finance director Gregor Alexander said.
UBS analysts said: “Developments on international expansion in renewables are positive but not sufficient to offset the operational miss.”
Shares fell 0.3%, or 5.5p, to 1598p.
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