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Scottish & Southern tests water for £10m stake in tidal power

Utilities consider sinking money in renewables firm

Tim Webb
Sunday 24 December 2006 01:00 GMT
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Scottish & Southern Energy (SSE) is in talks to invest up to £10m in a tidal energy specialist ahead of a possible stock market flotation next year.

Marine Current Turbines (MCT), which is speaking to other potential investors, including the German-owned E.ON UK, will make an announcement next month on the outcome of its fundraising efforts.

The Bristol-based company is planning to install the UK's largest commercial tidal-energy project off the coast of Northern Ireland this spring. The project will use sea currents to generate 1MW of electricity - enough to meet the energy needs of 1,000 households.

It had been due to go live in September but encountered technical problems. If the new launch, now pencilled in for the spring, is a success, MCT is expected to press ahead with a listing on the Alternative Investment Market, which could value the company at around £30m. MCT has retained the services of KPMG's corporate finance division to advise it.

SSE's investment, probably in exchange for a stake in MCT, would be the largest by a major utility in a tidal-energy firm. Until now, utilities have favoured backing more proven forms of renewable generation, such as wind farms. But the Government's energy White Paper, due out in the spring, is expected to provide bigger subsidies to wave and tidal projects, making them more attractive to investors.

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