June 3, 2020 / 2:57 PM / a month ago

Total to acquire 51% stake in SSE $3.7 billion UK wind farm project

The logo of French energy group Total is seen on a gas station in Montreuil, France, May 18, 2020. REUTERS/Charles Platiau

PARIS/LONDON (Reuters) - French oil major Total (TOTF.PA) said on Wednesday it will acquire a 51% stake in SSE’s (SSE.L) Seagreen 1 British offshore wind farm project, adding it represented a global investment of around 3.7 billion dollars.

Oil companies like Total have been ramping up investment in renewable projects in a bid to reduce their reliance on fossil fuel products and increase their exposure to low-carbon investments.

The Seagreen 1 project is located 27 kilometres from the coastline in Scottish waters of UK North Sea.

Once complete in 2022-23 the wind farm is expected to have capacity of 1,075 megawatts of electricity, enough to power around 1 million homes.

The project secured a 15-year guaranteed minimum price of almost 42 pounds per megawatt hour for around 40% of the electricity it will produce at last year’s British renewable subsidy auction.

Total said in a statement it will pay an upfront payment at closing of 70 million pounds ($88 million) and earn-outs up to 60 million pounds in aggregate, subject to performance conditions.

In a separate statement, British utility SSE said it signed a contract with turbine manufacturer MHI Vestas Offshore Wind to provide the blades for the project, which would be manufactured at its site in the Isle of Wight.

MHI Vestas is a venture between Denmark’s Vestas Wind Systems A/S (VWS.CO) and Japan’s Mitsubishi Heavy Industries 7011.T.

($1 = 0.7953 pounds)

Reporting by Benoit Van Overstraeten in Paris and Susanna Twidale in London, Editing by Elaine Hardcastle and Ed Osmond

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