SSE Thermal & Equinor to Acquire Triton PowerSource: RNS
SSE Thermal and Equinor to acquire Triton Power
--- £341m transaction for three plants including 1.2GW Saltend Power Station ---
--- Joint venture to drive decarbonisation of power generation at strategic sites ---
--- Equinor strengthens position as the UK's trusted partner in the energy transition ---
--- SSE remains committed to its existing science-based carbon targets ---
SSE Thermal and Equinor have entered into an agreement to acquire Triton Power Holdings Ltd from Energy Capital Partners for a total consideration of £341m shared equally between the partners.
The transaction represents another step forward for the two companies' existing collaboration, supporting the long-term decarbonisation of the UK's power system whilst contributing to security of supply and grid stability through flexible power generation in the shorter term. Following completion of the transaction, SSE Thermal and Equinor will jointly own and run Triton Power on a 50:50 basis.
Triton Power operates Saltend Power Station which is 1.2GW CCGT (Combined Cycle Gas Turbine) and CHP (Combined Heat & Power) power station located on the north of the Humber Estuary in East Yorkshire.
Saltend Power Station is a potential primary offtaker to Equinor's H2H Saltend hydrogen production project. H2H Saltend is expected to kick-start the wider decarbonisation of the Humber region as part of the East Coast Cluster, one of the UK's first carbon capture, usage and storage clusters.
In addition, the portfolio includes Indian Queens Power Station, a 140MW OCGT (Open Cycle Gas Turbine) in Cornwall, and Deeside Power Station, a decommissioned CCGT in north Wales which provides carbon-free inertia to the system.
Following the acquisition, SSE Thermal and Equinor will focus on using the Triton Power portfolio as a platform to develop more low-carbon projects to support the transition to net zero, building on the decarbonisation work already carried out by Triton.
The transaction underscores SSE Thermal and Equinor's shared ambition to decarbonise the Humber, which is the UK's most carbon-intensive industrial region, as well as the UK more widely. Initial steps to decarbonise Saltend Power Station are already underway, targeting partial abatement by 2027 through blending up to 30% of low-carbon hydrogen. In addition, carbon capture provides an additional valuable option for the site. SSE Thermal and Equinor will continue to work towards 100% abatement by 2035.
The transaction is expected to complete in September subject to UK National Security Filing and EU Merger Control.
SSE Thermal and Equinor Low-Carbon Thermal Partnership
The 82 existing employees of Triton Power will be employed by the joint venture in accordance with TUPE procedure. In line with Just Transition principles, the Joint Venture is committed to transitioning the assets for the net zero world through responsible ownership and operation, and in consultation with the local workforce and representatives.
This acquisition strengthens SSE Thermal and Equinor's portfolio of joint projects, which bring together expertise in power, natural gas, hydrogen and carbon capture and storage. This portfolio includes three development projects within the Humber region:
· Keadby 3 Carbon Capture Power Station, which could be the UK's first flexible power station equipped with carbon capture.
· Keadby Hydrogen Power Station, which could be one of the world's first 100% hydrogen-fuelled power stations.
· Aldbrough Hydrogen Storage, located in East Yorkshire, which could be one of the world's largest hydrogen storage facilities.
The two companies are also developing Peterhead Carbon Capture Power Station, situated on the Aberdeenshire coast in Scotland and there are further opportunities for hydrogen blending across SSE's generation portfolio, including at Keadby 2.
SSE's emissions pathways
In March SSE published its Net Zero Transition Plan aiming to achieve net zero emissions, by 2040 for scope 1 and scope 2, and by 2050 for scope 3. Interim Science-Based Targets, aligned to a 1.5°C pathway, support this net zero commitment.
Whilst this acquisition, once complete, will bring additional emissions onto SSE's greenhouse gas emissions inventory in the short term, SSE will not rebase its existing Science-Based Targets for 2030. It therefore expects to emit no more greenhouse gas emissions in 2030 than it is currently targeting, despite the addition of operational power plants which provide important services to the GB electricity system.
Aligned with UK Government policy to deliver Carbon Capture and Storage clusters and a hydrogen economy, the assets provide low-carbon opportunities in the latter half of this decade. This acquisition will form part of SSE's Net Zero Acceleration Programme (NZAP), which sets out plans to invest £12.5bn in the UK's electricity infrastructure by 2026, including any further capital incurred to decarbonise the existing activities. The acquisition is also wholly aligned to SSE's net zero pathway, reflecting the Group's wider ambition to invest in projects with a low-carbon focus, and bolsters its options to deliver the more than 3GW of low-carbon flexible thermal and distributed generation targeted for FY31. SSE's NZAP targets and EPS guidance remain unchanged following this acquisition.
Catherine Raw, Managing Director of SSE Thermal, said:
"Flexible energy will be absolutely essential as renewable energy scales up over the coming years, providing vital back-up while protecting security of supply. But the real prize will be how we decarbonise that flexible energy over the longer term, and we are excited, in particular, by the hydrogen and carbon capture opportunities at Saltend. Together with Equinor, we will explore every avenue to decarbonise Saltend and create new opportunities at other assets so they can play a continued role in a net zero future. We welcome our new colleagues and I look forward to working with them all as they play a critical role over the years ahead."
Irene Rummelhoff, Executive Vice President Marketing, Midstream & Processing at Equinor, said:
"This acquisition together with SSE Thermal demonstrates our commitment to building a broad energy partnership with the UK. We will continue to work to supply the UK market with reliable energy and to reduce emissions by offering a transition to hydrogen through our hydrogen project H2H Saltend. Contributing to flexible power supplies with low CO2 emissions to support weather-dependent renewable energy is essential to ensure energy security through the energy transition."
Notes to Editors
About SSE Thermal
SSE Thermal is responsible for SSE plc's flexible generation and energy storage activities, with over 600 direct employees across the UK and Ireland. As part of its commitment to achieving net zero carbon emissions, the business has a core focus on decarbonising its operations through carbon capture and storage (CCS) and hydrogen technology. In addition to Keadby 3, SSE Thermal is progressing plans with Equinor for another CCS-equipped power station at Peterhead in Scotland, as well as further low-carbon power stations in the Humber. SSE Thermal is part of the FTSE-listed SSE plc, the UK's clean energy champion and a Principal Partner to the UK Government for COP26. Find out more at www.ssethermal.com.
Equinor is the country's leading energy provider, supplying natural gas, oil and electricity, and aims to reach net zero emissions globally by 2050. It is a leader in carbon capture & storage and hydrogen, developing the H2H Saltend low-carbon hydrogen production plant that is at the heart of the Zero Carbon Humber alliance. It is collaborating with SSE Thermal on low-carbon power projects using hydrogen and carbon capture in the Humber and a further carbon capture power project in Scotland. It is partnering in the Net Zero Teesside power project and, as part of the Northern Endurance Partnership, it is developing CO2 transport and storage infrastructure for the East Coast Cluster, comprising the Humber and Teesside. Equinor's UK activities also include operating offshore oil and gas fields and offshore wind farms, and its expansion plans include Dogger Bank, the world's largest offshore wind farm. Find out more at www.equinor.co.uk.
About Triton Power
Triton Power is a private independent power generating company with a capacity of 1.35GW. It provides power to the UK wholesale electricity market through its UK power stations, playing an important role in security of supply when renewable generation does not deliver. Its combined output is sufficient to provide electricity for up to half a million homes in the UK.
Triton Power is part of Equinor's H2H (Hydrogen to Humber) Saltend decarbonisation project which in March 2021 won joint funding through ISCF (Industrial Strategy Challenge Fund) from Innovate UK to carry out FEED studies to convert the Saltend CHP to burn a 30% blend of Blue Hydrogen. Its Deeside Power Station's two gas turbines have been repurposed to provide National Grid ESO with vital system support services as part of a six-year contract.
Indian Queens Power Station is an OCGT (Open Cycle Gas Turbine) power station located in Cornwall. The station has an output capacity of 140 MW providing voltage support to the UK electricity market as part of an ancillary services contract with National Grid.