Airtricity has agreed to sell part of its interest in the Arklow Bank wind energy project to a Spanish group in a deal which could be valued in the region of €250 million.
The Irish renewable energy company yesterday announced that it has agreed to sell 50 per cent of the first two phases of the offshore electricity generation project to Spanish group, Energia Hidroelectrica de Navarra (EHN).
Details of the deal are confidential, but industry sources yesterday estimated its value at around the €250 million mark. The first two phases of the Arklow Bank project will generate a total of 120 megawatts (mw) of electricity.
The development costs have been running at €4,000 per kilowatt (kw), which amounts to a total of €500 million. Industry sources said last night that it was unlikely that the sale price would exceed the development cost.
As part of the deal, Airtricity will get an option to acquire a similar interest in EHN's planned wind energy project off the Cape of Trafalgar on Spain's south Atlantic coast. This will generate a total of 200mw of power when it is up and running, and has a projected cost of about €280 million.
In addition, EHN will jointly develop the second phase of the Arklow Bank project with Airtricity.
It is understood that as well as jointly financing the development, both parties will share technology and expertise that are expected to contribute to cutting the overall cost of the project.
The first phase of Arklow is completed and is now undergoing testing. It should be coming on-line at some point this year. According to an Airtricity spokesman, both phases are will be supplying electricity to the national grid, and are not affected by the electricity regulator's announcement that the grid would not be signing further contracts for wind-generated electricity for the time being.
General Electric (GE) Energy was the co-developer of the first phase. Under that deal, GE Energy funded the construction of Arklow's first phase, and will own it until demonstration, testing and certification are completed. Airtricity then has the option to purchase it.
The Arklow Bank wind farm lies 10km off the Wicklow coast. It will be the largest of its kind in the world, with a capacity of over 500mw and up to 140 turbines when it is completed.
