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Sweden

Market economics attract big utility -- Vattenfall buys AMEC

Swedish utility Vattenfall has boosted its presence in the UK with the purchase of AMEC Wind Energy Ltd from engineering and project management company AMEC plc for a cash consideration of £126.6 million (EUR 160 million). The acquisition gives Vattenfall, Europe's fifth largest electricity generator, an entry into onshore wind farm development in Britain.

The group already owns the 90 MW Kentish Flats offshore wind farm and is poised to buy Eclipse Energy, which is developing around 200 MW of wind capacity, including the consented Ormonde offshore project off the north-west coast of England. The AMEC portfolio comprises 573 MW of onshore projects, either consented or in development.

The deal includes a framework agreement to develop the acquired portfolio and develop new wind projects in the UK. AMEC will provide specialist consultancy, engineering and project management services to Vattenfall's onshore and offshore UK wind projects. In addition, Vattenfall and AMEC are to collaborate in a "strategic alliance" to develop other low carbon energy projects in the UK.

AMEC was known for some time to be reviewing the future of its loss-making wind development business. "We recognise that our skills are best deployed in the delivery of wind farms rather than in their development," a spokesman says. AMEC established its wind project development arm eight years ago with the purchase of Border Wind a north of England project developer.

Portfolio

The portfolio acquired by Vattenfall consists of one 30 MW site under construction and eight at varying stages in the planning process with a potential capacity of over 540 MW. The sale does not include AMEC's retained interest in a controversial 650 MW project on the Scottish island of Lewis, site permission for which was refused in April. AMEC's management team remains with the business being sold to Vattenfall.

Vattenfall's CEO, Lars G Josefsson, says the group has ambitious plans for renewable energy. "AMEC Wind is a sound company with long experience within this field and has developed important projects in line with our business and ambitions," he says. "Vattenfall sees the economics of the UK wind sector being attractive as the UK also benefits from high wind speeds, providing wind farms in the UK with higher load factors than wind farms in much of continental Europe."

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