UKPN acquires United Utilities renewable assets

UK Power Networks Services has acquired 70 renewable energy assets which will generate almost 69MW of electricity for United Utilities.

UU Solar, which has assets including solar, wind and hydro energy plants, has been acquired from SDCL Energy Efficiency Income Trust LLP (SEEIT) for £90.8 million, around £9.2 million less than the c.£100 million SEEIT paid for the portfolio in July 2022.

The portfolio is underpinned by a long-term Power Purchase Agreement with United Utilities.

UKPN said the investment “represents another strategic addition to its broad portfolio”.

David Mitchell, director of UK Power Networks Services, said: “Our vision is to deliver sustainable, reliable energy and we see this renewables portfolio as a natural fit. Our long-term objective is to grow our technology and geographic footprint in the renewables sector.

“We have been building our capacity in this sector in recent years and recently delivered one of the largest solar car ports in the UK. This acquisition has been carefully negotiated to achieve a good price and is another example of us investing in large portfolios of key renewable UK assets.”

Jonathan Maxwell, chief executive of the investment manager SDCL, said: “The sale is positive news for SEEIT as it makes a meaningful contribution to its objectives to reduce short term borrowings, to improve liquidity and to focus on investment in higher yielding assets that support SEEIT’s total return objectives.

“The agreed price represents a premium to the company’s last published valuation, which supports the approach that SEEIT seeks to take to its portfolio valuations.”

“UK Power Networks Services represents an excellent strategic buyer for a high-quality portfolio serving an important client. We hope to build on our relationship with both United Utilities and UK Power Networks Services in the future to deliver new opportunities for SEEIT,” he added.

United Utilities agreed to sell its renewable energy business to SEEIT for approximately £100 million in July 2022.

The water company had previously said the disposal of its renewable energy assets – valued at £65.5 million – would support the acceleration of its carbon initiatives, allowing it continue benefitting from their output while reinvesting the proceeds in other low carbon projects.