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£40m buyout secures wind power project

Alex Salmond’s dream for Scotland to generate the equivalent of 100% of its electricity demand from renewable resources by 2020 has received a boost with two major European energy companies announcing they are joining forces to build one of the country’s most significant offshore windfarms.

The future of the Inch Cape development, in which an estimated 180 turbines will be installed 10 miles off the coast of Angus, was unclear after a consortium led by Germany’s RWE said last year that it was abandoning the scheme.

But it emerged yesterday that Spanish oil company Repsol is buying the developer, SeaEnergy Renewables Ltd, in a deal reported to be worth £40 million. Repsol has lined up a Portuguese partner to help build the Inch Cape project, which has received a £1m investment from the Crown Estate.

The windfarm will produce enough power for almost 700,000 homes and is significantly bigger than what is currently the world’s current largest offshore windfarm, off Foreness Point in Kent, where 100 turbines are expected to generate enough electricity to power 200,000 homes. However, other planned developments in Scottish waters will dwarf both.

Inch Cape is scheduled for completion by 2018. The First Minister said yesterday’s announcement was a “massive vote of confidence in Scotland’s offshore wind sector”.

Mr Salmond said: “With around a quarter of Europe’s offshore wind energy potential, Scotland is uniquely positioned to develop this exciting industry and major companies like Doosan, Gamesa and Mitsubishi have already announced plans to develop their offshore wind interests here.”

The Crown Estate (CE) awarded the Inch Cape site to a consortium led by RWE in February 2009, but in May last year German firm said it was abandoning the project, citing its pre-occupation with other onshore and offshore renewable energy commitments.

A CE statement said the future of the project had been secured with its investment. It said: “The £1m sum has enabled work on the site to continue to plan, and safeguards a key element of the Scottish Territorial Waters project.

Gareth Baird, the CE’s Scottish Commissioner, said: “This investment demonstrates the critical role played by the Crown Estate in helping to drive the Scottish offshore wind industry.

“The Crown Estate’s structure and diverse UK portfolio makes this investment possible and has enabled a Scottish-based developer to attract investment into the economy from two international developers.”

The sale of SeaEnergy Renewables Ltd, the offshore wind unit of Aberdeen-based SeaEnergy PLC, to Repsol subsidiary Repsol Nuevas Energias is subject to approval by SeaEnergy PLC shareholders.

When the deal is completed, Repsol will bring in EDP Renewables, Portugal’s largest industrial group and one of Europe’s main energy companies, as a partner in the Inch Cape project.

They will continue to work on the preparation of a consent application for submission to Scottish Government.

Mr Salmond said: “Repsol’s purchase of SeaEnergy Renewables is also testament to the strength of Scottish companies that have helped position us as a global leader in offshore wind.

“SeaEnergy, which is now focusing on its existing assets, including its marine renewables services business and oil and gas interests, is an example of a company reaping the rewards of decisive and early leadership in a developing industry sector.”