SSE has just announced the sale of a 50% interest in the Greater Gabbard offshore windfarm development to RWE (in the guise of npower renewables) for £308 million (which includes reimbursement of the 50% share of past capital costs).
So let's look at the values:
GG is planned to be 504 MW and is fully consented. A price of £308 million for 252 MW equates to £1.2 million per MW, but this number is confused by the capital reimbursement being made to SSE for money they've already spent on RWE's behalf.
SSE bought the 50% interest in GG from Fluor for £40 million earlier this year before any real money had been spent. So, if there's no uplift in the actual value of the project, this implies that the partners have spent around £500 million on turbines, steel orders and other big-ticket items since May.
Our instinct is that it's unlikely that SSE could have gone through all of this amount in six months (although it's not impossible: the turbine supply agreement was announced in May and might be worth a total of £750 million, although its unlikely that a large proportion of that money has been spent).
If our instinct is right, it suggests that SSE has pulled off an extremely nifty deal, stepping into a consented project and reaping all of the benefit of taking it to financial close., but the developers won't have spent all of that yet.
As an aside, we'd expect RWE to have negotiated the right to acquire the ROCs from the project, but this may not concern SSE which is currently in almost full compliance with the Renewables Obligation and presumably thinks it would have been oversupplied with ROCs if it owned all of GG. We also note the interesting detail that the project cost is now described as £1.3 billion excluding the connection to the electricity grid.
