United Utilities group is planning to sell of its renewable energy business, UU Renewable Energy Limited, in a deal worth around £100 billion. The business will be sold to SDCL Energy Efficiency Income Trust.
UU has built a portfolio of green assets, including wind, solar and hydro renewable energy technologies, since 2014. The company currently has 70 clean energy generation sites which generate clean energy on-site. This energy is then used directly by the company, which delivers water and wastewater services across the Northwest. The portfolio will be majority solar energy and produce 69MW of clean energy a year.
The parent company will continue to use the clean energy produced by its divested green energy firm once it is sold. By selling this business, United Utilities is planning to invest capital back into its forthcoming phase of clean energy investment as it moves towards a net-zero model.
A proportion of revenues will be supported by existing government feed-in tariffs.
The Sustainable Development Capital CEO, Jonathan Maxwell, said that the project would be able to provide clean energy services on a direct basis to a key end-user. This, he said, would lessen the demand on the grid and reduce carbon emissions overall.
He explained that SEEIT would be buying an on-site operational portfolio with the opportunity to scale, growing its exposure in the UK and overall diversification.
UU's stakeholders and customers have been assured that United Utilities is still committed to following a low-carbon operating model and to moving towards a net-zero business in the coming years.
This new model is likely to provide interest to other water, energy and infrastructure businesses that are considering the best way to right-size and optimise their portfolios in the current challenging operating market.