Sunday, February 19, 2006

30m ScottishPower wind deal

Fri 17 Feb 2006

£30m ScottishPower wind deal
SCOTTISHPOWER yesterday showed its long-term commitment to renewable energy by agreeing a £30 million, 15-year deal to buy electricity from a wind farm in Huntly.

The utility said it had agreed the deal with the Englefield Renewable Fund which owns the site. The farm is expected to be completed by February 2007.

The news cements the company's position as the UK's biggest provider of wind energy, bringing its total output to 271mW - enough to heat 150,000 homes. The group aims to have 1,000mW in operation by 2010 - when the government hopes to have 10 per cent of all UK energy coming from renewable resources. The group's strategy of investing in wind farms has been endorsed by new chief executive Philip Bowman, who joined the company following the sacking of Ian Russell in January. It emerged this week that Bowman - who last headed Allied Domecq - has been awarded nearly £700,000 worth of shares as an incentive to join the company.

The award is dependent on the meeting of certain performance targets, and will vest in three years. The conditions will be measured in relation to financial performance, customer service and returns for shareholders. Eight other senior employees were helped to top up their shareholdings yesterday, as part of the group's employee share-ownership plan.

The long-term award to Bowman is further evidence that ScottishPower believes it can cling on to its independence in the coming months, following the rejection of a 570p-a-share offer from German group E.ON last November. Many analysts had thought that Bowman had been employed to tout the business to prospective new owners, although he has strongly denied this is the case. E.ON will be free to bid again in May under Takeover Panel rules.

However, news that he is in line for a £700,000 bonus is unlikely to please customers, who were told last week that their gas bills will be hiked by 15 per cent from 1 March - their fifth rise since 2004. The latest rise takes the average gas bill for customers in central Scotland to £692 a year, meaning Bowman could decide to use his bonus to heat 1,000 homes.